No. 15-423

IN THE

Supreme Court of the United States

BOLIVARIAN REPUBLIC OF VENEZUELA, PETRÓLEOS DE VENEZUELA, S.A.,

AND PDVSA PETRÓLEO, S.A., Petitioners,

v.

HELMERICH & PAYNE INTERNATIONAL DRILLING CO., AND HELMERICH & PAYNE DE VENEZUELA, C.A.,

Respondents.

ON WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA CIRCUIT

BRIEF FOR RESPONDENTS

DAVID W. OGDEN Counsel of Record DAVID W. BOWKER CATHERINE M.A. CARROLL BLAKE C. ROBERTS MOLLY M. JENNINGS WILMER CUTLER PICKERING HALE AND DORR LLP 1875 Pennsylvania Avenue, NW Washington, DC 20006 (202) 663-6000 david.ogden@wilmerhale.com

(i)

QUESTION PRESENTED

Whether jurisdiction under the expropriation ex-ception of the Foreign Sovereign Immunities Act of 1976, 28 U.S.C. § 1605(a)(3), is established where the required commercial-activity nexus to the United States is present and the complaint puts in issue a sub-stantial claim that rights in property have been taken in violation of international law.

(ii)

CORPORATE DISCLOSURE STATEMENT

Helmerich & Payne International Drilling Compa-ny is a wholly owned subsidiary of Helmerich & Payne, Inc. Blackrock, a publicly traded company, owns ap-proximately 10 percent of the stock of Helmerich & Payne, Inc.

Helmerich & Payne de Venezuela, C.A. is a wholly owned subsidiary of Helmerich & Payne International Drilling Company.

(iii)

TABLE OF CONTENTS

Page QUESTION PRESENTED ............................................... i

CORPORATE DISCLOSURE STATEMENT ............. ii

TABLE OF AUTHORITIES ........................................... v

INTRODUCTION .............................................................. 1

STATEMENT ..................................................................... 3

A. Respondents’ Venezuelan Business ................... 3

B. The Expropriation ................................................ 5

C. Proceedings Below ................................................ 7

SUMMARY OF ARGUMENT ....................................... 13

ARGUMENT ..................................................................... 15

I. JURISDICTION IS NOT DEFEATED BY THE

POSSIBILITY A COMPLAINT MIGHT FAIL TO

STATE A CLAIM ........................................................... 15

A. Subject-Matter Jurisdiction Does Not Turn On The Merits ............................................ 15

B. The Bell Rule Applies In A Wide Range Of Contexts .............................................. 19

1. Sherman Act ................................................. 20

2. Bankruptcy ................................................... 21

3. Criminal law .................................................. 21

4. Admiralty ...................................................... 23

5. Section 1343(3) .............................................. 23

6. Securities Exchange Act ............................ 25

7. Tucker Act .................................................... 25

iv

TABLE OF CONTENTS—Continued

Page

II. THE “NORMAL PRACTICE” APPLIES TO THE

EXPROPRIATION EXCEPTION .................................... 27

A. The FSIA’s Text Requires Plaintiffs To Place “In Issue” A Particular Type Of Claim ................................................................ 28

B. Congress Enacted The Expropriation Exception To Authorize U.S. Courts To Decide Whether Property Was Taken In Violation Of International Law ........................................................................ 32

C. The FSIA’s Structure Confirms That The Expropriation Exception Applies Where The Plaintiff Has Asserted A Colorable Expropriation Claim ......................... 37

III. ABANDONING BELL WOULD COMPLICATE

FSIA LITIGATION AND UNDERMINE FSIA

POLICIES ...................................................................... 44

A. Petitioners’ Rule Would Frontload The Burdens Of Litigation Into The Threshold Phase .................................................. 44

B. Abandoning Bell Would Serve No Oth-er Policy ................................................................ 51

CONCLUSION ................................................................. 55

v

TABLE OF AUTHORITIES

CASES Page(s)

Aerolineas Argentinas v. United States, 77 F.3d 1564 (Fed. Cir. 1996) .................................... 26

Agudas Chasidei Chabad v. Russian Federation, 528 F.3d 934 (D.C. Cir. 2008) ..................................................... 10, 28

Alfred Dunhill of London, Inc. v. Republic of Cuba, 425 U.S. 682 (1976) ...................................................................... 32, 33

Arbaugh v. Y&H Corp., 546 U.S. 500 (2006) ............................. 18, 19, 20, 43, 47

Argentine Republic v. Amerada Hess Shipping Corp., 488 U.S. 428 (1989) .................. 40, 41

Aurora City v. West, 74 U.S. (7 Wall.) 82 (1868) ............................................................................ 29

Baker v. Carr, 369 U.S. 186 (1962) .................................. 24

Banco Nacional de Cuba v. Farr, 383 F.2d 166 (2d Cir. 1967) ........................................ 10

Banco Nacional de Cuba v. Sabbatino, 376 U.S. 398 (1964) ..................................................... 45

Banco Nacional de Cuba v. Sabbatino, 307 F.2d 845 (2d Cir. 1962) ........................................ 10

Barcelona Traction, Light & Power Co. (Belgium v. Spain), 1970 I.C.J. 3 (Feb. 5) ......................................................................... 11

Bates v. Bodie, 245 U.S. 520 (1918) ................................. 29

Bell v. Hood, 327 U.S. 678 (1946) ........................... passim

vi

TABLE OF AUTHORITIES—Continued

Page(s)

Best Medical Belgium, Inc. v. Kingdom of Belgium, 913 F. Supp. 2d 230 (E.D. Va. 2012) ............................................................ 52

Binderup v. Pathe Exchange, Inc., 263 U.S. 291 (1923) ..................................................... 20

Bray v. Alexandria Women’s Health Clinic, 506 U.S. 263 (1993) ........................................ 24

Brecht v. Abrahamson, 507 U.S. 619 (1993) .................. 43

Chittenden v. United States, 126 Fed. Cl. 251 (2016) ............................................................................ 26

Clay v. United States, 537 U.S. 522 (2003) .................... 27

Dole Food Co. v. Patrickson, 538 U.S. 468 (2003) ...................................................................... 11, 27

Eastern Enterprises v. Apfel, 524 U.S. 498 (1998) ...................................................................... 25, 26

Engage Learning, Inc. v. Salazar, 660 F.3d 1346 (Fed. Cir. 2011) .................................................. 26

Excelsior Wooden Pipe Co. v. Pacific Bridge Co., 185 U.S. 282 (1902) ................................ 19

Ezeiruaku v. Bull, 617 F. App’x 179 (3d Cir. 2015) ............................................................... 52

The Fair v. Kohler Die & Specialty Co., 228 U.S. 22 (1913) ................................................. 17, 19

First National Bank of Denver v. Klug, 186 U.S. 202 (1902) ..................................................... 21

Flanders v. Coleman, 250 U.S. 223 (1919) ..................... 21

vii

TABLE OF AUTHORITIES—Continued

Page(s)

Geneva Furniture Manufacturing Co. v. S. Karpen & Bros., 238 U.S. 254 (1915) ....... 17, 18, 19

Hagans v. Lavine, 415 U.S. 528 (1974) ............... 17, 24, 28

Hart v. B.F. Keith Vaudeville Exchange, 262 U.S. 271 (1923) ..................................................... 17

Helmerich & Payne International Drilling Co. v. Bolivarian Republic of Venezuela, 2016 WL 2771117 (D.D.C. May 13, 2016) ................ 49

Henderson ex rel. Henderson v. Shinseki, 562 U.S. 428 (2011) ............................................... 18, 19

Holloway v. Schweiker, 724 F.2d 1102 (4th Cir. 1984) .............................................................. 51

Huntington v. Laidley, 176 U.S. 668 (1900) .................. 17

Illinois Central Railroad Co. v. Adams, 180 U.S. 28 (1901) ....................................................... 19

In re Papandreou, 139 F.3d 247 (D.C. Cir. 1998) ............................................................................. 49

In re Republic of Philippines, 309 F.3d 1143 (9th Cir. 2002) .............................................................. 30

Intelsat Global Sales & Marketing, Ltd. v. Community of Yugoslav Posts Telegraphs & Telephones, 534 F. Supp. 2d 32 (D.D.C. 2008) ............................................................................. 48

Jerome B. Grubart v. Great Lakes Dredge & Dock Co., 513 U.S. 527 (1995) ............... 1, 19, 23, 40

John Doe Co. v. United States, 350 F.3d 299 (2d Cir. 2003) ............................................................... 30

viii

TABLE OF AUTHORITIES—Continued

Page(s)

Johnson v. Jones, 515 U.S. 304 (1995) ............................ 48

Kilburn v. Socialist People’s Libyan Arab Jamahiriya, 376 F.3d 1123 (D.C. Cir. 2004) ........... 47

Lamar v. United States, 240 U.S. 60 (1916)............. 21, 22

Lee v. Taipei Economic & Cultural Representative Office, 716 F. Supp. 2d 626 (S.D. Tex. 2009) ....................... 49

Local Division 732, Amalgamated Transit Union v. Metropolitan Atlanta Rapid Transit Authority, 667 F.2d 1327 (11th Cir. 1982) ............................................................ 52

Louie v. United States, 254 U.S. 548 (1921) ................... 22

Louisville & Nashville Railroad Co. v. Rice, 247 U.S. 201 (1918) ..................................................... 19

McKesson Corp. v. Islamic Republic of Iran, 672 F.3d 1066 (D.C. Cir. 2012) .................................. 48

Merrill Lynch, Pierce, Fenner & Smith Inc. v. Manning, 136 S. Ct. 1562 (2016) ..................... 2, 17, 19

Moden v. United States, 404 F.3d 1335 (Fed. Cir. 2005) ...................................................................... 26

Montana v. United States, 440 U.S. 147 (1979)............. 29

Morrison v. National Australia Bank Ltd., 561 U.S. 247 (2010) .......................... 18, 25, 26, 42

Mt. Healthy City School District Board of Education v. Doyle, 429 U.S. 274 (1977) ................. 24

Musacchio v. United States, 136 S. Ct. 709 (2016) ............................................................................ 29

ix

TABLE OF AUTHORITIES—Continued

Page(s)

OBB Personenverkehr AG v. Sachs, 136 S. Ct. 390 (2016) ............................................. 40, 42

Osborn v. Bank of the United States, 22 U.S. (9 Wheat.) 738 (1824) .............................. 16, 17

Permanent Mission of India v. City of New York, 551 U.S. 193 (2007) .............................................. 12, 31, 32, 42, 43, 51

Phoenix Consulting, Inc. v. Republic of Angola, 216 F.3d 36 (D.C. Cir. 2000) ..................................... 8, 44, 45, 46, 48

Powerex Corp. v. Reliant Energy Services, Inc., 551 U.S. 224 (2007) ...................... 27, 54

Ralston Steel Corp. v. United States, 340 F.2d 663 (Ct. Cl. 1965)......................................... 26

Republic of Austria v. Altmann, 541 U.S. 677 (2004) ......................................... 33, 39, 54

Republic of Iraq v. Beaty, 556 U.S. 848 (2009) ............................................................................ 44

Roberts v. Galen of Virginia, Inc., 525 U.S. 249 (1999) ..................................................... 55

Romero v. International Terminal Operating Co., 358 U.S. 354 (1959) .......................... 23

Ruhrgas AG v. Marathon Oil Co., 526 U.S. 574 (1999) ......................................... 17, 18, 50

San Remo Hotel, L.P. v. City & County of San Francisco, 545 U.S. 323 (2005) ..................... 29

Saudi Arabia v. Nelson, 507 U.S. 349 (1993) .......... 40, 51

x

TABLE OF AUTHORITIES—Continued

Page(s)

Shapiro v. McManus, 136 S. Ct. 450 (2015) ................... 16

Simmons v. South Carolina, 512 U.S. 154 (1994) ............................................................................ 29

Simon v. Republic of Hungary, 812 F.3d 127 (D.C. Cir. 2016) .................................................... 51

Sisson v. Ruby, 497 U.S. 358 (1990) .......... 2, 17, 18, 19, 23

Southern Pacific Railroad Co. v. United States, 168 U.S. 1 (1897) ............................................ 29

Steel Co. v. Citizens for a Better Environment, 523 U.S. 83 (1998) .................... passim

Stellwagen v. Clum, 245 U.S. 605 (1918) ........................ 21

Swafford v. Templeton, 185 U.S. 487 (1902) .................. 17

United States v. Mitchell, 463 U.S. 206 (1983) ...................................................................... 25, 26

United States v. Williams, 341 U.S. 58 (1951) ................................................................ 22, 23, 26

Verlinden B.V. v. Central Bank of Nigeria, 461 U.S. 480 (1983) ............................................ passim

Victory Transport Inc. v. Comisaria General de Abastecimientos y Transportes, 336 F.2d 354 (2d Cir. 1964) ............................................................... 33

Williams v. Aztar Indiana Gaming Corp., 351 F.3d 294 (7th Cir. 2003) ...................................... 51

xi

TABLE OF AUTHORITIES—Continued

Page(s)

DOCKETED CASES

Helmerich & Payne International Drilling Co. v. Bolivarian Republic of Venezuela, No. 15-698 (U.S.) ........................................................... 8

Permanent Mission of India v. City of New York, No. 06-134 (U.S.) ........................................ 31, 42

STATUTES AND RULES

15 U.S.C. § 78aa ................................................................. 25

18 U.S.C. § 3231 ................................................................. 22

22 U.S.C. § 2370 ................................................................. 34

28 U.S.C. § 1330 .............................................................................. 8 § 1331 .......................................................... 13, 16, 19, 38 § 1333 ............................................................................ 23 § 1343 ...................................................................... 23, 24 § 1491 ............................................................................ 25 § 1603 ............................................................................ 24 § 1605 ................................................................... passim § 1605A ......................................................................... 38 § 1607 ............................................................................ 38 § 1610 ...................................................................... 32, 37

42 U.S.C. § 1983 ............................................................................ 24 § 1985 ............................................................................ 24

Judicial Code of Mar. 3, 1911, Pub. L. No. 61-475, 36 Stat. 1087 ........................................................ 21

Sherman Anti-Trust Act, 26 Stat. 209 (July 2, 1890) ............................................................................. 20

xii

TABLE OF AUTHORITIES—Continued

Page(s)

Fed. R. Civ. P. Rule 12 ............................................................... 8, 25, 50 Rule 26 ......................................................................... 49

LEGISLATIVE MATERIALS

H.R. Rep. No. 94-541 (1975) ............................................. 35

H.R. Rep. No. 94-1487 (1976) ................... 30, 33, 37, 44, 48

S. Rep. No. 93-676 (1974) .................................................. 35

S. Rep. No. 94-673 (1976) .................................................. 35

Immunities of Foreign States: Hearing on H.R. 3493 Before the Subcommittee on Claims and Governmental Relations of the House Committee on the Judiciary, 93d Cong. (1973).................................................... 30, 36

House Committee on Foreign Affairs, 88th Cong., Report on Expropriation of American-Owned Property by Foreign Governments in the Twentieth Century (Comm. Print 1963), 2 I.L.M. 1066 ........................... 34

110 Cong. Rec. A5153 (1964) ................................................................ 34 19513 (1964) ................................................................. 34

OTHER AUTHORITIES

13A Fed. Proc. § 36:458 (Sept. 2016) ............................... 44

Black’s Law Dictionary (4th ed. 1968) ........................... 29

Brownlie, Ian, Principles of Public Interna-tional Law (7th ed. 2008) ........................................... 36

xiii

TABLE OF AUTHORITIES—Continued

Page(s)

Comment, American Oil Investors’ Access to Domestic Courts in Foreign Nationalization Disputes, 123 U. Pa. L. Rev. 610 (1975) ................................................. 35, 36

Garner, Bryan A., A Dictionary of Modern Legal Usage (2d ed. 1995).......................................... 28

Letter from Acting Legal Adviser Tate to Acting Attorney General Perlman (1952), reproduced in Alfred Dunhill of London, Inc. v. Republic of Cuba, 425 U.S. 682 (1976) ...................................................................... 32, 33

Note, Avoiding Expropriation Loss, 79 Harv. L. Rev. 1666 (1966) ............................................... 34, 36

Note, The Castro Government in American Courts: Sovereign Immunity and the Act of State Doctrine, 75 Harv. L. Rev. 1607 (1962) ............................................................................ 36

Restatement (Third) of Foreign Relations Law (1987) ...................................................................... 10, 11

Shapiro, Stephen M., et al., Supreme Court Practice (10th ed. 2013) ............................................. 55

U.S. Department of Justice, Office of Foreign Litigation, https://www.justice.gov/civil/office-foreign-litigation (last updated Oct. 20, 2014) ....................................................................... 53

xiv

TABLE OF AUTHORITIES—Continued

Page(s)

U.S. Department of State, Bureau of Intelligence and Research, Nationalization, Expropriation, and Other Takings of United States and Certain Foreign Property since 1960, Research Study RECS-14 (Nov. 30, 1971), 11 I.L.M. 84 (1972) ..................................... 34, 35

U.S. Department of State, Digest of United States Practice in International Law (1989-2015 eds.) ........................................................... 53

U.S. Department of State, Statement by the Department of State on Policy on “Hot” Libyan Oil, 13 I.L.M. 767 (1974) ........................ 35, 36

Vandevelde, Kenneth J., Bilateral Investment Treaties (2010) ............................................................ 36

White House Press Release, U.S. Statement on Economic Assistance and Investment in Developing Nations (Jan. 19, 1972), 11 I.L.M. 239 (1972) .................................................... 35

IN THE

Supreme Court of the United States

No. 15-423

BOLIVARIAN REPUBLIC OF VENEZUELA, PETRÓLEOS DE VENEZUELA, S.A.,

AND PDVSA PETRÓLEO, S.A., Petitioners,

v.

HELMERICH & PAYNE INTERNATIONAL DRILLING CO. AND HELMERICH & PAYNE DE VENEZUELA, C.A.,

Respondents.

ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS

FOR THE DISTRICT OF COLUMBIA CIRCUIT

BRIEF FOR RESPONDENTS

INTRODUCTION

This Court has long held that where a statute con-fers subject-matter jurisdiction over a particular class of cases, the assertion of a substantial claim within that class establishes jurisdiction for the court to decide the claim one way or the other. The possibility that the al-legations might not entitle the plaintiff to relief does not defeat jurisdiction. That rule was “well settled” when the Court decided Bell v. Hood, 327 U.S. 678, 682 (1946). It describes the Court’s “[n]ormal practice” across a range of contexts. Jerome B. Grubart v. Great

2

Lakes Dredge & Dock Co., 513 U.S. 527, 537 (1995). And it derives not from the “particular phrasing” of any one statute, Merrill Lynch, Pierce, Fenner & Smith Inc. v. Manning, 136 S. Ct. 1562, 1570 (2016), but from the very “nature of the jurisdictional inquiry,” Sisson v. Ruby, 497 U.S. 358, 365 (1990), and the problems that would follow if jurisdiction depended on the merits.

Petitioners urge the Court to abandon that rule in cases brought under the expropriation exception of the Foreign Sovereign Immunities Act, which authorizes courts to decide certain claims against foreign sover-eigns where “rights in property taken in violation of international law are in issue.” Respondents asserted such a claim here, seeking redress for the unlawful ex-propriation of their entire U.S.-owned drilling business in Venezuela—an expropriation that was motivated by the discriminatory animus of Venezuela’s Chávez re-gime toward the United States and U.S.-owned compa-nies, and for which respondents have never received one penny of the compensation required by interna-tional law.

Petitioners contested the district court’s jurisdic-tion on the ground that respondents were not legally entitled to relief because the allegations did not show a taking of their rights in property in violation of interna-tional law. Applying Bell, the court of appeals correctly held that petitioners’ merits-based arguments could not defeat jurisdiction so long as respondents’ claims were substantial—as indeed they are.

In urging the Court to disregard Bell, petitioners emphasize that the FSIA prescribes substantive stand-ards defining foreign sovereigns’ immunity from suit, and that courts must determine at the outset whether those standards are “actually” met. Those propositions

3

are undoubtedly correct. But they only beg the ques-tion: What substantive standards does the statute im-pose? The text, structure, history, and purposes of the FSIA dictate that jurisdiction lies under the expropria-tion exception where the complaint (1) actually satisfies detailed territorial and commercial nexus require-ments, and (2) actually puts “in issue” a claim that the plaintiff’s rights in property have been taken in viola-tion of international law. The latter is precisely the type of inquiry Bell governs, and nothing in the FSIA displaces that rule that the possibility a claim might fail does not defeat the court’s jurisdiction to decide it.

Petitioners’ view—that a court has no authority to decide whether rights in property were taken in viola-tion of international law unless it first concludes that rights in property were taken in violation of interna-tional law—would not shield sovereigns from any bur-dens of litigation. It would simply frontload those bur-dens into the jurisdictional stage, including potentially broad discovery into the factual basis of the claim. This Court has consistently rejected similar approaches to federal jurisdiction. It should do so again here.

STATEMENT

A. Respondents’ Venezuelan Business1

Respondent Helmerich & Payne International Drilling Company (“H&P-IDC”) is a Delaware corpora-tion based in Tulsa, Oklahoma. For more than five dec-ades, H&P-IDC ran a successful drilling business in Venezuela, working through a wholly owned subsidiary

1 The Statement relies on the complaint’s allegations, which

the parties agreed must be accepted as true for present purposes. JA132-133.

4

—most recently, respondent Helmerich & Payne de Venezuela (“H&P-V”).

H&P-IDC conducted its Venezuelan operations from the United States by supplying H&P-V with pow-erful land-based drilling rigs and equipment. JA61. From the United States, H&P-IDC provided continu-ous technical and administrative guidance and made all significant strategic and operational decisions, such as whether to transfer equipment between regions and whether to enter into particular contracts. JA92-93. Although H&P-V is incorporated in Venezuela, the Venezuelan government designated and treated it as a “FOREIGN COMPANY at all relevant legal effects” due to its 100% U.S. ownership. JA83-84.

After Venezuela nationalized its oil industry in the 1970s, H&P-V began providing services—eventually, exclusively—to Venezuela’s state-owned oil companies, petitioners Petróleos de Venezuela, S.A. and PDVSA Petróleo, S.A. (together, “PDVSA”). JA59-60, 125. Both entities are agencies or instrumentalities of peti-tioner Venezuela. JA126. H&P-V worked under re-curring contracts with PDVSA. The most recent con-tracts were signed in 2007. JA65, 126-127, 171-172.

Shortly after executing the 2007 contracts, PDVSA fell substantially behind on payments. JA69, 128-129, 172. Despite H&P-V’s complete performance, PDVSA failed to pay tens of millions of dollars due under the contracts. JA172-173. PDVSA acknowledged its debt and promised to pay, but never did. JA69-70, 129. In 2009, H&P-V told PDVSA it would not extend the con-tracts until PDVSA met its obligations. JA128-129. As the term of each contract ended, H&P-V disassembled its rigs and stacked its equipment in its Venezuelan yards pending payment. Id.

5

B. The Expropriation

PDVSA’s refusal to honor its commitments came amid intensifying hostility by the Venezuelan govern-ment toward the United States and U.S.-owned com-panies. JA84-88. As reported by the U.S. State De-partment, then-President Hugo Chávez “define[d] him-self in opposition to the United States, using incendiary rhetoric to insult the U.S. Government and U.S. influ-ence in Latin America.” JA86. Venezuela expelled the U.S. ambassador in 2008 and deepened ties with U.S. adversaries, while senior officials directed vitriolic rhetoric against U.S. companies. JA86, 88. The U.S. Commerce Department reported a campaign of “active discrimination” by the Venezuelan government against American businesses. JA87.

In June 2010, without apparent legal authority, PDVSA employees assisted by armed soldiers of the Venezuelan National Guard blockaded H&P-V’s facili-ties in western Venezuela and similarly seized H&P-V’s headquarters in eastern Venezuela a few days later. JA72. Two weeks later, the National Assembly issued a “Bill of Agreement” declaring the “public utility and social interest” of H&P-V’s rigs and assets. JA74, 174. President Chávez issued an Expropriation Decree that day, belatedly authorizing the “forcible taking” of H&P-V’s rigs and “all the personal and real property and other improvements made by [H&P-V].” JA74, 129-130. The Decree declared H&P-V’s property “the unencumbered and unlimited property of PDVSA, S.A., or its designee affiliate, as expropriating entity.” JA74.

As the complaint explains in detail, petitioners tar-geted and seized respondents’ business because of the Chávez regime’s pervasive anti-American animus. PDVSA and Venezuelan officials stated publicly at the

6

time that H&P-V was taken because of its U.S. owner-ship. On June 23, 2010, before the Venezuelan govern-ment authorized the expropriation, PDVSA trumpeted its seizure of a U.S.-owned business: “The Bolivarian Government, through [PDVSA] [had] nationalized 11 drilling rigs” belonging to “the company Helmerich & Payne (HP), a U.S. transnational firm.” JA73. Two days later, PDVSA boasted about “[t]he nationalization of the oil production drilling rigs from the American contractor H&P” and “reject[ed] statements made by spokesmen of the American empire—traced [sic] in our country by means of the oligarchy.” JA74, 85. It de-clared that the drills would “be operated by PDVSA as a company of all Venezuelans”—no longer the property of an “American company.” JA85.

When the National Assembly passed the Bill of Agreement, the President of the Assembly’s Commit-tee on Energy and Mines accused opponents of the ex-propriation of acting “in accordance with the instruc-tions of the [U.S.] Department of State” and trying to “subsidize the big business transnational corporations, so that they can promote what they know best to do, which is war, … through the large military industry, of the Empire and its allies.” JA84. Two days later, Ven-ezuela’s oil minister—who also served as PDVSA’s president—spoke at a political rally in H&P-V’s yard, condemning respondents’ “foreign gentlemen inves-tors” and announcing that employees of “this American company” would become employees of PDVSA. JA83; see JA173-175.

PDVSA now operates respondents’ former busi-ness, using all of respondents’ confiscated real and per-sonal property—including the specialized drilling rigs and equipment, vehicles, office space, and maintenance forms—and employing H&P-V’s rig managers, rig

7

workers, and other professionals to perform the func-tions the business had performed when run by re-spondents. JA76-78. Respondents no longer maintain any significant tangible property or commercial opera-tions in Venezuela. Stripped of all its productive as-sets, H&P-V ceased to operate and no longer exists as a going concern. JA77-78.

In the ensuing six years, respondents have re-ceived no compensation. PDVSA initiated eminent-domain proceedings in Venezuela in July 2010, JA75-76, and respondents have participated as required under Venezuelan procedural rules. But those proceedings remain stalled indefinitely.

Nor can any compensation be expected. JA98-102. Private parties rarely prevail against the government in Venezuela’s politically controlled courts. Out of 325 suits against the government surveyed by the U.S. State Department in 2009, the court ruled in the gov-ernment’s favor 324 times; the sole exception was later annulled. JA100-101. According to a 2010 report of the Inter-American Commission on Human Rights, Vene-zuelan judges handing down decisions negatively af-fecting government interests have been removed from the bench or even prosecuted and held under inhumane conditions. JA101. And as the U.S. Trade Representa-tive reported in 2011, out of 76 companies nationalized under one 2009 law, none received compensation. JA80.

C. Proceedings Below

In September 2011, respondents sued petitioners for a taking in violation of international law, asserting jurisdiction under the expropriation exception of the Foreign Sovereign Immunities Act of 1976 (“FSIA”). JA103-104, 131. That provision abrogates sovereign

8

immunity and authorizes U.S. courts to decide claims against a foreign state or its agencies and instrumental-ities in any case where there is a commercial-activity nexus to the United States and where “rights in prop-erty taken in violation of international law are in issue.” 28 U.S.C. § 1605(a)(3); see id. § 1330(a).2

Nearly a year after the complaint was filed, peti-tioners moved to dismiss. Proceeding under Federal Rules of Civil Procedure 12(b)(1), 12(b)(2), and 12(b)(6), petitioners challenged the expropriation claims for lack of subject-matter jurisdiction, lack of standing, and lack of personal jurisdiction, as well as under the act-of-state doctrine and forum non conveniens. JA118. Apart from their act-of-state argument, petitioners did not move, and have never moved, to dismiss for failure to state a claim. Id.

Because some of petitioners’ arguments raised fac-tual challenges to jurisdiction, respondents served re-quests for jurisdictional discovery, as permitted by cir-cuit precedent holding that when a motion to dismiss challenges the factual basis of FSIA jurisdiction, the court “must go beyond the pleadings” to resolve the factual dispute after allowing an appropriately tailored opportunity for jurisdictional discovery. Phoenix Con-sulting, Inc. v. Republic of Angola, 216 F.3d 36, 40 (D.C. Cir. 2000); see U.S. Br. 14 n.2. Petitioners refused to respond, so respondents moved to compel. JA3, 118.

2 H&P-V also alleged breach-of-contract claims against

PDVSA, asserting jurisdiction under the FSIA’s commercial-activity exception, 28 U.S.C. § 1605(a)(2). Those claims are pend-ing in a separate petition for certiorari. Helmerich & Payne Int’l Drilling Co. v. Bolivarian Republic of Venezuela, No. 15-698 (Nov. 25, 2015).

9

The parties resolved the dispute by agreeing in a joint stipulation to litigate four legal questions based on the allegations in the complaint—before any jurisdic-tional discovery—and to defer petitioners’ other de-fenses for later adjudication after jurisdictional discov-ery. JA117-123. Among the four initial issues were two of petitioners’ legal challenges to subject-matter jurisdiction under § 1605(a)(3). First, petitioners con-tended that their taking of property owned by H&P-V could not violate international law because H&P-V is incorporated in Venezuela. Second, petitioners con-tended that H&P-IDC’s own “rights in property” were not taken in violation of international law because H&P-V held legal title to the seized assets. JA119-120, 134-142, 160-168, 177-178.

The district court rejected petitioners’ latter argu-ment and denied the motion to dismiss H&P-IDC’s claim. JA160-169. The court granted the motion to dismiss H&P-V’s claim. JA134-142, 168-169.

The U.S. Court of Appeals for the D.C. Circuit af-firmed in part and reversed in part. In an opinion by Judge Tatel, joined by Chief Judge Garland, the court began by underscoring “the distinction between juris-diction—a court’s constitutional or statutory power to decide a case—and ultimate success on the merits.” JA178. Citing Bell v. Hood, 327 U.S. 678 (1946), the court observed that “‘[j]urisdiction … is not defeated … by the possibility that the averments [in a complaint] might fail to state a cause of action on which [the plain-tiffs] could actually recover.’” JA178. The court there-fore followed circuit precedent holding, consistent with Bell, that a motion to dismiss a FSIA claim on the ground that the plaintiff has not pleaded a taking of rights in property in violation of international law should be granted only if the claim is “‘wholly insub-

10

stantial or frivolous.’” Id. (citing Agudas Chasidei Chabad v. Russian Fed’n, 528 F.3d 934, 943 (D.C. Cir. 2008)). Under that standard, the court held that re-spondents’ expropriation claims could proceed.

As to H&P-V, the court acknowledged that a state’s expropriation of its own national’s property “generally” does not violate international law, JA179, but held that this “domestic takings rule” did not re-solve the case in light of the complaint’s allegations that petitioners “unreasonably discriminated against [H&P-V] on the basis of its sole shareholder’s nationality,” JA180. Those allegations “implicat[ed] an exception to the domestic takings rule” for discriminatory takings in which a state targets a domestically incorporated but foreign-owned corporation for expropriation based on the nationality of its owners. Id. The court found “‘persuasive’” the Second Circuit’s reasoning in Banco Nacional de Cuba v. Sabbatino, 307 F.2d 845 (2d Cir. 1962), see JA181, which considered the Castro regime’s similar expropriation of U.S.-owned businesses incor-porated in Cuba. Sabbatino held that “‘[w]hen a for-eign state treats a corporation in a particular way be-cause of the nationality of its shareholders, it would be inconsistent for [the court] in passing on the validity of that treatment to look only to the ‘nationality’ of the corporate fiction.’” JA180 (quoting Sabbatino, 307 F.2d at 861); see also Banco Nacional de Cuba v. Farr, 383 F.2d 166, 185 (2d Cir. 1967) (reaffirming Sabbatino “with emphasis”). The D.C. Circuit found that holding consistent with the Restatement (Third) of Foreign Re-lations Law, which “recognizes discriminatory takings as a violation of international law,” and “cite[s] Sab-batino as an example” of an unlawful “discriminatory taking.” JA180-181 (discussing Restatement (Third) of Foreign Relations Law § 712 cmt. f & reporter’s note 5

11

(1987) (“Restatement (Third)”)). The court emphasized that respondents’ allegations “could be viewed as demonstrating ‘unreasonable distinction’ based on na-tionality” and were therefore “sufficient to plead a ‘non-frivolous’ discriminatory takings claim,” JA182-183—particularly in light of petitioners’ failure to cite any authority foreclosing H&P-V’s claim, JA182.3

As to H&P-IDC, the court held that even though H&P-IDC did not own legal title to the expropriated assets, it had “sufficient rights in [the expropriated] property to support its expropriation claim.” JA171. The court rejected petitioners’ arguments, based on Dole Food Co. v. Patrickson, 538 U.S. 468 (2003), that “rights in property” under the expropriation exception “must mean corporate ownership.” JA184. The court explained that Dole Food considered a separate provi-sion of the FSIA that—unlike the expropriation excep-tion—“expressly ‘speaks of ownership’” of shares. Id. (discussing 28 U.S.C. § 1605(b)(2)). Because the expro-priation exception “speaks only of ‘rights in property’

3 Petitioners relied below, as they do here (at 44-45), on Bar-

celona Traction, Light & Power Co. (Belgium v. Spain), 1970 I.C.J. 3 (Feb. 5). The court of appeals did not find that decision to bar H&P-V’s claim, see JA179-182—likely because the Interna-tional Court of Justice there did not consider the question in Sab-batino and this case, but instead examined the very different ques-tion of countries’ respective rights to assert “diplomatic protec-tion” of a corporation. It held only that, as among sovereigns com-peting to espouse a private claim against another sovereign, the state of incorporation has a right superior to the shareholder’s state to assert the corporation’s interests against a third state. Even in that context, the ICJ stressed that when the state of in-corporation is itself responsible for the injury, “considerations of equity might call for … protection of the shareholders … by their own national State.” 1970 I.C.J. at 48 ¶¶ 92-93; see Restatement (Third) § 213 reporters’ note 3 (1987).

12

generally, not ownership in shares,” the court of ap-peals here followed the analysis in Permanent Mission of India v. City of New York, 551 U.S. 193, 197 (2007), which held that the phrase “rights in immovable prop-erty” in § 1605(a)(4) is not limited to “ownership or pos-session,” but “‘focuses more broadly on “rights in” property.’” JA185. And the court looked to circuit precedent holding that “corporate ownership of land and property … does not deprive the sole beneficial owners—United States citizens—of a property inter-est” of their own. JA186 (quotation marks omitted). The court found that precedent “especially persuasive” because H&P-IDC “has suffered a total loss of control over its subsidiary, which has ceased operating as an ongoing enterprise because all of its assets were tak-en.” JA187.

Judge Sentelle dissented as to the expropriation is-sues. JA194-199.

The court of appeals denied rehearing, JA44-45, and denied petitioners’ motion to stay the mandate, JA46. The Chief Justice denied petitioners’ application to this Court for a stay of the mandate. No. 15A258 (Sept. 1, 2015).

The case returned to the district court, where peti-tioners’ other jurisdictional defenses remained pending. Among those defenses, petitioners contended that re-spondents’ claims did not satisfy the expropriation ex-ception’s nexus requirement that, as relevant here, the expropriated property or its proceeds be “owned or op-erated by an agency or instrumentality of the foreign state … that … is engaged in a commercial activity in the United States.” 28 U.S.C. § 1605(a)(3). Because petitioners denied that those conditions were met, re-spondents sought jurisdictional discovery—consistent

13

with D.C. Circuit precedent, supra p. 8, and with the parties’ agreement in the joint stipulation, JA120-121—tailored to determine the ownership or operation of the expropriated assets. See JA17-20. Despite the court’s order setting deadlines for that limited jurisdictional discovery as contemplated by the joint stipulation, peti-tioners resisted discovery, and the court ultimately or-dered them to respond to some requests. JA18-35.

Meanwhile, petitioners sought review of the court of appeals’ decision in this Court, presenting two inter-national-law issues and a third question concerning the application of Bell v. Hood. The Court granted the pe-tition, limited to the Bell v. Hood question, and did not grant review of the international-law issues. The dis-trict court stayed further proceedings. JA35.

SUMMARY OF ARGUMENT

This Court has consistently held that “[j]urisdiction … is not defeated … by the possibility that the aver-ments [in a complaint] might fail to state a cause of ac-tion on which [the plaintiff] could actually recover.” Bell v. Hood, 327 U.S. 678, 682 (1946). Contrary to pe-titioners’ assertion (at 16), that rule was not specially “created” in Bell for use only in § 1331 cases. Long be-fore Bell and since, the Court has followed that rule in evaluating jurisdiction under a wide range of statutes, regardless of variations in their text or policies. That ordinary practice reflects the nature of the jurisdiction-al inquiry and obviates a host of practical difficulties that would arise if a claim’s merit were a jurisdictional requirement.

That rule dictates the outcome here. Under the expropriation exception, a foreign state “shall not be immune” from suit in the United States “in any case” in

14

which (1) the requisite commercial-activity nexus ex-ists, and (2) “rights in property taken in violation of in-ternational law are in issue.” 28 U.S.C. § 1605(a)(3). The latter prong requires that the plaintiff put “in is-sue” a claim that rights in property have been taken in violation of international law—the very type of inquiry that Bell routinely governs. That interpretation is compelled by the Act’s use of the phrase “in issue,” which simply asks what assertions are “in dispute” or “under discussion.” It is compelled by the Act’s histo-ry, which confirms that Congress enacted the expropri-ation exception to provide a U.S. forum to decide on the merits claims seeking a remedy for the unlawful taking of property by a foreign state. And it is compelled by the Act’s structure, which imposes “substantive provi-sions requiring some form of substantial contact with the United States” and delineates “the types of actions for which foreign sovereigns may be held liable.” Ver-linden B.V. v. Central Bank of Nigeria, 461 U.S. 480, 490, 496-497 (1983). When a complaint asserts “the type[] of action[]” authorized by the FSIA, id. at 496, and bears the prescribed contacts with the United States, the FSIA’s “detailed federal law standards” are met, id. at 494, immunity from suit is abrogated, and the court has jurisdiction over the subject matter. Nothing in the FSIA displaces the longstanding, wide-spread practice that the possibility a claim might fail on its merits does not defeat the court’s jurisdiction to de-cide the merits, at least where the claim is not “clearly … immaterial and made solely for the purpose of ob-taining jurisdiction” or “wholly insubstantial and frivo-lous.” Bell, 327 U.S. at 682-683.

Petitioners would surely prefer to resolve the mer-its question whether the complaint states a violation of international law for which respondents are entitled to

15

relief before litigating jurisdiction. Article III dictates otherwise. Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83 (1998). Petitioners therefore seek an end-run around Steel Co. by conflating the merits question with the standard defining the court’s jurisdiction to decide. But the purpose of the FSIA’s jurisdictional grant is to abrogate the foreign sovereign’s immunity from suit in order to allow the court to decide whether a violation has occurred for which plaintiffs are entitled to relief. It makes no sense to require courts to decide that mer-its question in order to determine their authority to de-cide it. And imposing that requirement would signifi-cantly complicate the litigation of FSIA claims by ex-panding the jurisdictional determination to include the full range of disputes that might arise on the merits, both legal and factual—with the added complexity that unless the rigorous standard of implied waiver of im-munity is met, those merits disputes could not be waived, must be considered by courts sua sponte, and would presumably be the subject of repeated interlocu-tory appeals. Abandoning Bell would thus do nothing to promote comity or shield foreign sovereigns from the burdens of litigation. It would do the opposite. Absent any indication that Congress intended that result, the Court should adhere to its longstanding and well-settled jurisdictional practice.

ARGUMENT

I. JURISDICTION IS NOT DEFEATED BY THE POSSIBILITY

A COMPLAINT MIGHT FAIL TO STATE A CLAIM

A. Subject-Matter Jurisdiction Does Not Turn On The Merits

It is “firmly established in [this Court’s] cases that the absence of a valid (as opposed to arguable) cause of action does not implicate subject-matter jurisdiction,

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i.e., the courts’ statutory or constitutional power to ad-judicate the case.” Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83, 89 (1998). “Whether the complaint states a cause of action on which relief could be granted … must be decided after and not before the court has assumed jurisdiction over the controversy.” Bell v. Hood, 327 U.S. 678, 682 (1946); see also Shapiro v. McManus, 136 S. Ct. 450, 455 (2015) (“[w]e have long distinguished between failing to raise a substantial fed-eral question for jurisdictional purposes … and failing to state a claim for relief on the merits”).

Petitioners portray that rule as an outlier, cabined to issues of federal-question jurisdiction under 28 U.S.C. § 1331. Their contention disregards nearly two centuries of precedent. This Court has long adhered to the foundational principle that where a provision con-fers jurisdiction over a particular type of claim, juris-diction is established if the plaintiff asserts a claim within the defined class that is not wholly insubstantial or frivolous. The possibility that the claim might fail does not oust the court of jurisdiction to decide it.

This proposition is commonly attributed to Bell, but its roots run much deeper. In Osborn v. Bank of the United States, 22 U.S. (9 Wheat.) 738, 822 (1824), Chief Justice Marshall explained that a court’s subject-matter jurisdiction “depend[s] on the character of the cause,” not its merit. It therefore suffices to establish jurisdiction under Article III’s “arising under” clause where:

the title or right set up by the party, may be defeated by one construction of the constitution or laws of the United States, and sustained by the opposite construction, provided the facts necessary to support the action be made out.

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Id. As Justice Holmes later put it, “if [a] bill or declara-tion makes a claim that if well founded is within the ju-risdiction of the Court it is within that jurisdiction whether well founded or not.” Hart v. B.F. Keith Vau-deville Exch., 262 U.S. 271, 273 (1923); see also, e.g., Huntington v. Laidley, 176 U.S. 668, 679 (1900); Swaf-ford v. Templeton, 185 U.S. 487, 493 (1902). By the time the Court decided Bell, it was “well settled” that so long as a claim is not “wholly insubstantial and frivo-lous,” “[j]urisdiction … is not defeated … by the possi-bility that the averments [in a complaint] might fail to state a cause of action on which [the plaintiff] could ac-tually recover.” 327 U.S. at 682-683.

Although the Court first articulated this rule in de-fining courts’ jurisdiction to consider cases “arising un-der” the Constitution and laws of the United States, the rule’s development—contrary to petitioners’ the-sis—“[wa]s not grounded in [the ‘arising under’] provi-sion’s particular phrasing.” Merrill Lynch, Pierce, Fenner & Smith Inc. v. Manning, 136 S. Ct. 1562, 1570 (2016). Rather, the rule derives from the very “nature of the jurisdictional inquiry,” Sisson v. Ruby, 497 U.S. 358, 365 (1990), and the limits of courts’ authority to act without jurisdiction.

Jurisdiction, this Court has frequently explained, is simply a court’s “power to consider and decide one way or the other, as the law may require.” Geneva Furni-ture Mfg. Co. v. S. Karpen & Bros., 238 U.S. 254, 259 (1915); see also, e.g., Ruhrgas AG v. Marathon Oil Co., 526 U.S. 574, 577 (1999) (“authority over the category of claim in suit”); Hagans v. Lavine, 415 U.S. 528, 538 (1974) (“authority conferred by Congress to decide a given type of case one way or the other”); The Fair v. Kohler Die & Specialty Co., 228 U.S. 22, 25 (1913) (“au-thority to decide the case either way”). Because juris-

18

diction “refers to a tribunal’s power to hear a case,” it “presents an issue quite separate from the question whether the allegations the plaintiff makes entitle him to relief.” Morrison v. National Australia Bank Ltd., 561 U.S. 247, 254 (2010) (quotation marks omitted). The jurisdictional question is “legally and analytically ante-cedent” to the merits, Sisson, 497 U.S. at 365, and is “not to be declined merely because it is not foreseen with certainty that the outcome will help the plaintiff,” Geneva Furniture, 238 U.S. at 259. Rather, as peti-tioners emphasize (at 21), a court must determine its jurisdiction at the outset; until it has done so, pronounc-ing upon the merits would “carr[y] the court[] beyond the bounds of authorized judicial action and thus of-fend[] fundamental principles of separation of powers.” Steel Co., 523 U.S. at 94; see Ruhrgas, 526 U.S. at 583.

The Court’s long adherence to the Bell rule also re-flects concern for what it has recognized are “drastic” consequences that would flow from treating a claim’s merit as a threshold jurisdictional requirement. Hen-derson ex rel. Henderson v. Shinseki, 562 U.S. 428, 435 (2011); see Arbaugh v. Y&H Corp., 546 U.S. 500, 513-516 (2006). Because subject-matter jurisdiction “‘in-volves a court’s power to hear a case,’” it can “‘never be forfeited or waived’” unless the stringent test for waiv-ers of immunity is met, and “courts, including this Court, have an independent obligation to determine whether subject-matter jurisdiction exists, even in the absence of a challenge from any party.” Arbaugh, 546 U.S. at 514; see also, e.g., Henderson, 562 U.S. at 434-435 (“Branding a rule as going to a court’s subject-matter jurisdiction alters the normal operation of our adversarial system.”). For example, statutory argu-ments concerning the scope of jurisdiction “would have to be considered by this Court even though not raised

19

earlier in the litigation—indeed, this Court would have to raise them sua sponte,” Steel Co., 523 U.S. at 93, re-sulting in potential “waste of judicial resources” and “unfair[] prejudice [to] litigants,” Henderson, 562 U.S. at 434; see also Arbaugh, 546 U.S. at 514. The Court has thus consistently rejected attempts to “forestall the ultimate action of the court by attacking its jurisdiction upon propositions which belong to the merits.” Illinois Cent. R.R. Co. v. Adams, 180 U.S. 28, 40 (1901).

B. The Bell Rule Applies In A Wide Range Of Contexts

Given that it derives from practical considerations and “the nature of the jurisdictional inquiry,” Sisson, 497 U.S. at 365, rather than the “particular phrasing” of any single provision, Manning, 136 S. Ct. at 1570, the Court has never limited the Bell rule to determinations of federal-question jurisdiction under § 1331. Contrary to petitioners’ contentions, Bell constitutes the Court’s “[n]ormal practice” across a wide range of jurisdictional determinations. Jerome B. Grubart v. Great Lakes Dredge & Dock Co., 513 U.S. 527, 537 (1995). Some of those contexts involve provisions that, like § 1331, em-ploy the “arising under” phrasing, such as where juris-diction arises under the patent laws, see, e.g., The Fair, 228 U.S. at 25; Geneva Furniture, 238 U.S. at 258-259; Excelsior Wooden Pipe Co. v. Pacific Bridge Co., 185 U.S. 282, 285-286 (1902), or under laws regulating commerce, see Louisville & Nashville R.R. Co. v. Rice, 247 U.S. 201, 203 (1918). But the Court has also applied the Bell principle under statutes that use entirely dif-ferent language to define the claims they authorize courts to decide.

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1. Sherman Act

The Sherman Anti-Trust Act gave courts “jurisdic-tion to prevent and restrain violations of th[at] act.” Act of July 2, 1890, 26 Stat. 209, 209.4 In Binderup v. Pathe Exchange, Inc., 263 U.S. 291, 304-305 (1923), the defendants argued that the plaintiffs “failed to state facts sufficient to constitute a cause of action” showing a violation of the Act, and the lower courts treated that failure as a jurisdictional defect. This Court reversed. Although the Sherman Act spoke of “violations” in-stead of claims “arising under” the statute, cf. Pet. Br. 32—or of “alleged” or “asserted” violations, cf. U.S. Br. 29—the Court explained that because jurisdiction is simply “the power to decide a justiciable controversy,” it cannot turn upon the merits:

A complaint, setting forth a substantial claim under a federal statute presents a case within the jurisdiction of the court as a federal court, and this jurisdiction cannot be made to stand or fall upon the way the court may chance to de-cide an issue as to the legal sufficiency of the facts alleged any more than upon the way it may decide as to the legal sufficiency of the facts proven. Its decision either way upon ei-ther question is predicated upon the existence of jurisdiction, not upon the absence of it.

263 U.S. at 305-306.

4 Before 1980, federal jurisdiction over cases “arising under”

the Constitution and laws of the United States was limited by a statutory amount-in-controversy requirement. See Arbaugh, 546 U.S. at 505-506. Individual statutes’ jurisdictional grants there-fore determined courts’ authority to adjudicate claims under those statutes. Id.

21

2. Bankruptcy

Under the Bankruptcy Act of 1903, trustees were authorized to set aside certain preferences and fraudu-lent transfers and to recover the transferred property into the estate; the district courts had jurisdiction “[f]or the purpose of such recovery.” Stellwagen v. Clum, 245 U.S. 605, 614 (1918) (quotation marks omitted); see Flanders v. Coleman, 250 U.S. 223, 227 (1919). In Flanders, the district court dismissed a suit for lack of jurisdiction after concluding that no preference or fraudulent transfer had been shown. 250 U.S. at 228. Although the statute did not use “arising under” lan-guage, this Court reversed, holding that consideration of the merits was not a proper basis for declining juris-diction where “there was enough alleged to properly invoke jurisdiction”:

As this court has not infrequently said, juris-diction must be determined not upon the con-clusion on the merits of the action, but upon consideration of the grounds upon which feder-al jurisdiction is invoked.

Id. at 228-229; see also First Nat’l Bank of Denver v. Klug, 186 U.S. 202, 204 (1902).

3. Criminal law

The Judicial Code of March 3, 1911, gave the dis-trict courts jurisdiction “[o]f all crimes and offenses cognizable under the authority of the United States.” Pub. L. No. 61-475, § 24, 36 Stat. 1087, 1091 (1911). In Lamar v. United States, 240 U.S. 60 (1916), the defend-ant challenged the district court’s jurisdiction on the ground that the indictment did not charge a crime against the United States. Writing for the Court, Jus-tice Holmes rejected that argument:

22

[N]othing can be clearer than that the district court, which has jurisdiction of all crimes cog-nizable under the authority of the United States, acts equally within its jurisdiction whether it decides a man to be guilty or inno-cent under the criminal law, and whether its decision is right or wrong. The objection that the indictment does not charge a crime against the United States goes only to the merits of the case.

Id. at 64 (citation omitted); see also Louie v. United States, 254 U.S. 548, 550-551 (1921) (defendant’s argu-ment that “an essential element of the crime against the United States was lacking” “did not raise a question properly of the jurisdiction of the court, but went to the merits”).

The Court continued to follow that rule under the modern statutory grant of criminal jurisdiction. Under 18 U.S.C. § 3231, district courts have original and ex-clusive jurisdiction “of all offenses against the laws of the United States.” In United States v. Williams, 341 U.S. 58 (1951), a perjury case, the lower courts held that the court in which the alleged perjury occurred had acted without jurisdiction—and that the defend-ant’s conduct therefore did not constitute perjury—because the indictment in that proceeding had not stat-ed a cognizable offense within the court’s jurisdiction under § 3231. Citing Bell, this Court rejected that con-clusion:

The District Court had jurisdiction of offenses against the laws of the United States. Hence, it had jurisdiction of the subject matter, to wit, an alleged violation of the federal conspiracy statute, and, of course, of the persons charged.

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… The circumstance that ultimately it is de-termined on appeal that the indictment is de-fective does not affect the jurisdiction of the trial court to determine the case presented by the indictment.

Id. at 66.

4. Admiralty

The Bell rule constitutes the “[n]ormal practice” in admiralty jurisdiction, Jerome B. Grubart, 513 U.S. at 537, where the jurisdictional statute “giv[es] federal district courts ‘original jurisdiction … of … [a]ny civil case of admiralty or maritime jurisdiction,’” id. at 531 (quoting 28 U.S.C. § 1333(1)). The Court has held, for example, that jurisdiction over maritime torts should not turn on a close examination of the particular causes of the alleged harm, because in making that inquiry a court “would have to decide to some extent the merits of the causation issue to answer the legally and analyti-cally antecedent jurisdictional question.” Sisson, 497 U.S. at 365; see also Romero v. International Terminal Operating Co., 358 U.S. 354, 359 (1959) (regardless whether Jones Act provided a right of action for an alien seaman against a foreign shipowner, plaintiff as-serted a “substantial claim” that was “sufficient to em-power the District Court to assume jurisdiction over the case and determine whether, in fact, the Act does provide the claimed rights”).

5. Section 1343(3)

The same approach governs 28 U.S.C. § 1343(3), which grants district courts “‘jurisdiction of any civil action … [t]o redress the deprivation, under color of any State law, … of any right, privilege or immunity secured by the Constitution of the United States or by

24

any Act of Congress providing for equal rights of citi-zens or of all persons within the jurisdiction of the United States.’” Hagans, 415 U.S. at 553. In Hagans, the court of appeals held that the plaintiff’s equal pro-tection claim failed rational-basis review and that the district court therefore lacked jurisdiction. Id. at 541-542. This Court reversed. Although the lower court’s analysis of the equal protection claim might have “prove[d] correct,” id. at 542, the claim was not so frivo-lous or insubstantial as to be outside the court’s juris-diction, id. at 539-540. The Court held that “the admon-ition of Bell v. Hood … should be followed here”—namely, that “‘[j]urisdiction … is not defeated … by the possibility that the averments might fail to state a cause of action on which petitioners could actually re-cover.’” Id. at 542; see also Bray v. Alexandria Wom-en’s Health Clinic, 506 U.S. 263, 285 (1993) (although plaintiff’s claims under § 1985 failed, they were not “‘wholly insubstantial and frivolous,’ … so as to deprive the District Court of jurisdiction” under § 1343(3)); Baker v. Carr, 369 U.S. 186, 199-201 (1962) (subject-matter jurisdiction lay under § 1343(3) where claim was not frivolous).5

5 As its sole example of an alleged exception to the Bell rule,

the United States cites (at 18 n.3) Mt. Healthy City School District Board of Education v. Doyle, 429 U.S. 274 (1977), which involved a § 1983 suit against a municipal corporation. Citing later-rejected precedent that municipal corporations were not subject to suit un-der § 1983, the Court stated in dicta that if jurisdiction had been asserted under § 1343, “it would [have been] appropriate for this Court to inquire, for jurisdictional purposes, whether a statutory action had in fact been alleged.” Id. at 278-279. But making a threshold determination that the named defendant is a proper de-fendant does not contravene Bell, any more than it would to de-termine at the threshold of a FSIA case whether a defendant is an “agency or instrumentality of a foreign state,” see 28 U.S.C.

25

6. Securities Exchange Act

Section 78aa of Title 15 gives district courts “‘ex-clusive jurisdiction of violations of [the Exchange Act] or the rules and regulations thereunder.’” Morrison, 561 U.S. at 254 n.3. In Morrison, the court of appeals affirmed a Rule 12(b)(1) dismissal of a securities class action for lack of subject-matter jurisdiction on the ground that § 10(b) of the Exchange Act did not apply extraterritorially. Id. at 253. This Court agreed that the plaintiffs failed to state a claim on which relief could be granted, id. at 273, but corrected the court of ap-peals’ “threshold error” in finding a lack of jurisdiction, id. at 253. Citing Bell, the Court contrasted the “merits question” of “what conduct § 10(b) reaches”—which would determine whether a plaintiff’s “allegations … entitle him to relief”—from the “quite separate” issue of subject-matter jurisdiction, which “refers to a tribu-nal’s power to hear a case.” Id. at 254 (quotation marks omitted). The Court underscored that although the plaintiffs’ allegations did not entitle them to relief un-der § 10(b), the district court had jurisdiction under 15 U.S.C. § 78aa to adjudicate the question. Id.

7. Tucker Act

Although this Court has not squarely addressed the issue, the lower federal courts have consistently fol-lowed Bell in evaluating their exclusive jurisdiction un-der the Tucker Act, 28 U.S.C. § 1491(a)(1), which waives the United States’ sovereign immunity for spec-ified types of claims, see United States v. Mitchell, 463 U.S. 206, 212 (1983); Eastern Enters. v. Apfel, 524 U.S.

§ 1603(b). Moreover, the Court in Mt. Healthy did not say what standard would apply in conducting that inquiry and did not pur-port to overrule Hagans.

26

498, 520 (1998). Citing Bell, the Court of Claims has held that where a plaintiff claims entitlement to a mon-ey award from the United States, the plaintiff “can properly come to the Court of Claims, at least if his claim is not frivolous but arguable.” Ralston Steel Corp. v. United States, 340 F.2d 663, 667 (Ct. Cl. 1965), cited with approval in Mitchell, 463 U.S. at 217 n.16. Any argument that the plaintiff is not entitled to relief “wrongly equates the issue of jurisdiction with the mer-its.” Id.; see also Engage Learning, Inc. v. Salazar, 660 F.3d 1346, 1353-1354 (Fed. Cir. 2011); Aerolineas Ar-gentinas v. United States, 77 F.3d 1564, 1572 (Fed. Cir. 1996). That approach governs claims seeking compen-sation for a taking, as to which jurisdiction “is proper” when plaintiff asserts “a nonfrivolous takings claim founded upon the Fifth Amendment.” Moden v. United States, 404 F.3d 1335, 1341 (Fed. Cir. 2005). The Court of Federal Claims thus routinely exercises jurisdiction over nonfrivolous takings claims against the United States even where the plaintiff ultimately fails to estab-lish a compensable taking of cognizable property inter-ests. E.g., Chittenden v. United States, 126 Fed. Cl. 251, 259-266 (2016).

In each of these contexts, the statutory grants of jurisdiction used different language and reflected dif-ferent policies. None said expressly that jurisdiction exists when rights are “‘non-frivolously alleged to be’ in issue,” Pet. Br. 3, or where “specified rights are colora-bly in issue,” Pet. Br. 29. Moreover, several of these contexts involved exclusive federal jurisdiction and had nothing to do with the allocation of jurisdiction between state and federal court. See, e.g., Morrison, 561 U.S. at 254 n.3; Eastern Enters., 524 U.S. at 520; Williams, 341 U.S. at 66; cf. Pet. Br. 4, 16, 35. But each statute au-thorized courts to decide a particular type of case. And

27

without regard to the statutes’ particular text or poli-cies, cf. U.S. Br. 26, the Court applied the settled rule that subject-matter jurisdiction—the courts’ power to decide either way—is established when a plaintiff pleads a colorable claim within the defined category.

II. THE “NORMAL PRACTICE” APPLIES TO THE EXPRO-

PRIATION EXCEPTION

Bell thus states a general rule that was “well set-tled” and widely applied long before Congress enacted the FSIA. Bell, 327 U.S. at 682. This Court “‘pre-sume[s] that Congress expects its statutes to be read in conformity with this Court’s precedents,’” Clay v. United States, 537 U.S. 522, 527 (2003); that presump-tion applies equally in interpreting jurisdictional provi-sions under the FSIA, see Powerex Corp. v. Reliant Energy Servs., Inc., 551 U.S. 224, 237 (2007); Dole Food Co. v. Patrickson, 538 U.S. 468, 478 (2003) (construing FSIA “consistent with” longstanding jurisdictional principles). “Absent a clear statutory command to the contrary” in the FSIA, the Court should “assume that Congress is aware of the universality” of the jurisdic-tional practice under Bell and expected it to apply. Powerex, 551 U.S. at 237 (quotation marks omitted).

Nothing in the FSIA rebuts that presumption. It is true, as petitioners incant, that the FSIA contains “de-tailed federal law standards” that define the contours of immunity and “comprehensively regulat[e] the amena-bility of foreign nations to suit in the United States.” Verlinden B.V. v. Central Bank of Nigeria, 461 U.S. 480, 493-494 (1983). And of course courts must deter-mine at the outset that the complaint “actually estab-lishe[s]” the requirements of the relevant exception. Pet. Br. 22. But those propositions are not remotely inconsistent with applying Bell, because the relevant

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requirement of the expropriation exception simply re-quires the assertion of a particular type of claim.

Section 1605(a)(3) contains two substantive re-quirements: (1) that a commercial-activity nexus to the United States exists—here, that the expropriated property or its proceeds are “owned or operated by an agency or instrumentality of the foreign state” that “is engaged in a commercial activity in the United States”—and (2) that “rights in property taken in viola-tion of international law are in issue.” Both of those re-quirements must “actually” be met. But the latter re-quirement is satisfied when the complaint actually places “in issue” a claim that rights in property have been taken in violation of international law. That is, it “requir[es] that [a] plaintiff assert a certain type of claim,” Agudas Chasidei Chabad v. Russian Fed’n, 528 F.3d 934, 941 (D.C. Cir. 2008)—precisely the type of in-quiry Bell governs. That reading is dictated by the FSIA’s text, history and purpose, and structure.

A. The FSIA’s Text Requires Plaintiffs To Place “In Issue” A Particular Type Of Claim

Section 1605(a)(3)’s condition that “rights in prop-erty taken in violation of international law are in issue” requires that the plaintiff put “in issue” a claim that its rights in property have been taken in violation of inter-national law. Like many other jurisdictional grants, that condition confers authority “to decide a given type of case one way or the other.” Hagans, 415 U.S. at 538. It does not require that the merit of the claim must al-ready have been established.

As the United States recognizes, the phrase “in is-sue” typically means “under discussion” or “in dispute.” U.S. Br. 15-16 (citing Garner, A Dictionary of Modern

29

Legal Usage 470 (2d ed. 1995)). The edition of Black’s Law Dictionary in print when the FSIA was drafted reflects this understanding, indicating that a question raised by the pleadings is “at issue” if it is “affirmed on one side and denied on the other.” Black’s Law Dic-tionary 159 (4th ed. 1968). Rights in property taken in violation of international law are thus “in issue” if one side asserts a taking of rights in property in violation of international law and the other side denies it.

That interpretation of “in issue” accords with the phrase’s natural meaning, as shown by its use in other contexts to refer to the subject of a dispute or argu-ment presented for judicial resolution. The legal test for issue preclusion, for example, is often said to turn on whether a right or question was “in issue.” Aurora City v. West, 74 U.S. (7 Wall.) 82, 98, 103 (1868); see al-so, e.g., Montana v. United States, 440 U.S. 147, 153 (1979) (preclusion applies to “‘right, question or fact distinctly put in issue and directly determined’”). These cases distinguish between the question “in issue” and the “determination of” that question. Bates v. Bod-ie, 245 U.S. 520, 526 (1918). The full faith and credit statute likewise ensures finality of matters “‘properly put in issue and actually determined’” in prior proceed-ings. San Remo Hotel, L.P. v. City & Cty. of San Francisco, 545 U.S. 323, 337 (2005) (quoting Southern Pac. R.R. Co. v. United States, 168 U.S. 1, 49 (1897)). Similarly, a litigant is often said to open the door to ar-gument or evidence on a particular subject by placing a contention “in issue” for resolution. See, e.g., Musac-chio v. United States, 136 S. Ct. 709, 718 (2016) (“stat-ute-of-limitations defense becomes part of a case only if the defendant puts the defense in issue,” triggering government’s burden to establish compliance); Sim-mons v. South Carolina, 512 U.S. 154, 178 (1994)

30

(O’Connor, J., concurring in judgment) (where State “puts the defendant’s future dangerousness in issue,” due process entitles defendant to inform jury of parole ineligibility); John Doe Co. v. United States, 350 F.3d 299, 302 (2d Cir. 2003) (loss of attorney-client privilege resulting from assertion of factual claims is “described … sometimes as ‘at issue’ waiver because it results from the party having placed a contention at issue”). As in these contexts, Congress would naturally have understood and expected the phrase “in issue” to de-scribe what the parties contested.

Comparison to § 1605(a)(4) reinforces this reading. Section 1605(a)(4) abrogates foreign sovereign immuni-ty in “cases … in which rights in property in the United States acquired by succession or gift … are in issue.” That exception permits litigation against foreign sover-eigns concerning “disposition of the property of a de-ceased person.” H.R. Rep. No. 94-1487, at 20 (1976); see Immunities of Foreign States: Hearing on H.R. 3493 Before the Subcomm. on Claims and Gov’tl Relations of the H. Comm. on the Judiciary, 93d Cong. 21 (1973) (“1973 House Hearing”) (testimony of Hon. Charles N. Brower, Legal Adviser, Department of State) (§ 1605(a)(4) provided a “pretty clear exception for es-tate … matters”). The purpose of the exception is to allow an orderly process for determining the rights of interested parties and disposing of property according-ly. It would make no sense to require the plaintiff first to establish those “rights in property” as a prerequisite to that orderly process. Rather, the exception turns on the type of claim at issue: whether “the sovereign’s claim is as a successor to a private party.” In re Re-public of Philippines, 309 F.3d 1143, 1150 (9th Cir. 2002) (emphasis added); see id. at 1151 (no immunity where “foreign state claims the same right which is en-

31

joyed by private persons” (emphasis added; quotation marks omitted)). In such litigation, the validity of the sovereign’s acquisition of rights in property is “in is-sue”—and therefore within the court’s jurisdiction to determine—just as an expropriation claim puts “in is-sue” whether a sovereign took rights in property in vio-lation of international law.

Petitioners rely heavily on Permanent Mission of India v. City of New York, 551 U.S. 193 (2007), which also considered § 1605(a)(4), but that decision supports the natural reading of “in issue.” In Permanent Mis-sion, the City of New York sued foreign governments “seeking declaratory judgments to establish the validi-ty of [certain] tax liens” it held against the sovereigns’ property. Id. at 196. The question was whether that action fell within the FSIA exception for “any case … in which … rights in immovable property situated in the United States are in issue.” 28 U.S.C. § 1605(a)(4). The Court held that the City satisfied the exception by putting its alleged rights “in issue” without assessing whether the City would succeed in “establishing” the validity of the liens. 551 U.S. at 202 (“[A] suit to estab-lish the validity of a tax lien places ‘rights in immovable property … in issue.’” (emphasis added)).

The Court took that approach even though the de-fendants claimed their property was “exempt from tax-ation pursuant to treaty.” No. 06-134 U.S. Br. 4, 2007 WL 736599. If true, that would have meant that the City had no enforceable rights in property and that the defendants would have been entitled to dismissal for failure to state a claim. But the Court did not credit that argument, and it similarly refused to consider oth-er arguments raised by the City that “ultimately [went] to the merits of the case.” 551 U.S. at 201-202 & n.2. The Court explained: “Because the only question before

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us is one of jurisdiction, and because the text and his-torical context of the FSIA demonstrate that petition-ers are not immune from the City’s suits, we leave these merits-related arguments to the lower courts.” Id. at 202 n.2; see infra pp. 42-43.

In contrast to the use of “in issue” in these provi-sions, § 1610 allows attachment of a foreign sovereign’s property where a judgment has already “establish[ed]” “rights in property which has been taken in violation of international law.” 28 U.S.C. § 1610(a)(3). Congress could have used similar language in § 1605(a)(3) had it intended to limit the expropriation exception to cases in which an unlawful taking of rights in property had been “establish[ed].” It did not.

B. Congress Enacted The Expropriation Excep-tion To Authorize U.S. Courts To Decide Whether Property Was Taken In Violation Of International Law

The history of the expropriation exception confirms that Congress intended it to authorize U.S. courts to decide certain claims: those asserting that property was taken in violation of international law.

Under the “absolute” theory of foreign sovereign immunity, foreign sovereigns could not be sued in U.S. courts without their consent, and courts generally de-ferred to the Executive Branch’s “suggestions of im-munity” in declining to exercise jurisdiction. Verlin-den, 461 U.S. at 486-487. As foreign states increasingly engaged in commercial activity affecting U.S. interests, however, the State Department sought to “enable per-sons doing business with [foreign states] to have their rights determined in the courts.” Letter from Acting Legal Adviser Tate to Acting Attorney General Perl-man (1952), reproduced in Alfred Dunhill of London,

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Inc. v. Republic of Cuba, 425 U.S. 682, 714 (1976) (“Tate Letter”). The State Department therefore abandoned the absolute theory in favor of the “restric-tive” theory, which restricted foreign sovereign im-munity to a state’s “sovereign or public acts,” while al-lowing claims to proceed “with respect to private acts.” Alfred Dunhill, 425 U.S. at 711.

Even after the Tate Letter, however, “foreign na-tions often placed diplomatic pressure on the State De-partment,” sometimes leading it to deviate from the re-strictive theory. Verlinden, 461 U.S. at 487. As a re-sult, “the governing standards were neither clear nor uniformly applied.” Id. at 488. Congress responded by enacting the FSIA to depoliticize the immunity process and “‘assur[e] litigants that … decisions [would be] made on purely legal grounds and under procedures that insure due process.’” Id. (quoting H.R. Rep. No. 94-1487, at 7); see Republic of Austria v. Altmann, 541 U.S. 677, 689-691, 699 (2004). To that end, the FSIA shifted responsibility for deciding immunity questions from the Executive Branch to the courts, Verlinden, 461 U.S. at 487-488, and codified legal standards “provid[ing] when and how parties can maintain a law-suit against a foreign state,” H.R. Rep. No. 94-1487, at 6. Rather than reverting to a broader theory of immun-ity, those legal standards provided that “[a] foreign state shall not be immune from the jurisdiction of courts of the United States or of the States in any case” in which any of several exceptions is met. 28 U.S.C. § 1605(a).

The expropriation exception went further than the restrictive theory in limiting foreign sovereign immuni-ty. Under the restrictive theory, sovereigns were im-mune from actions challenging “nationalization[s]” be-cause they were “strictly political or public acts.” Vic-

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tory Transp. Inc. v. Comisaria Gen. de Abastecimien-tos y Transportes, 336 F.2d 354, 360 (2d Cir. 1964); see Note, Avoiding Expropriation Loss, 79 Harv. L. Rev. 1666, 1666 (1966). But years of mounting concern with-in the political branches at the threat to American in-terests posed by lawless foreign expropriations prompted the further restriction of sovereign immunity in expropriation cases.

As a 1963 report described, expropriation of Amer-ican property abroad had increased substantially since 1945, see H. Comm. on Foreign Affairs, 88th Cong., Re-port on Expropriation of American-Owned Property by Foreign Governments in the Twentieth Century (Comm. Print 1963), 2 I.L.M. 1066, 1081 (1963), prompt-ing legislative measures aiming to provide redress for U.S. victims of expropriation. For example, in 1964, Congress addressed roadblocks created by the act-of-state doctrine with legislation to “establish the pre-sumption that private litigants are entitled to have a cause decided in accordance with the legal principles normally applied by our courts in cases properly within their jurisdiction.” 110 Cong. Rec. 19513, 19547 (1964). The legislation, codified at 22 U.S.C. § 2370(e)(2), “ma[de] clear that Federal and State courts are to be free in cases before them involving acts of foreign states to enforce principles of international law, includ-ing the requirement for prompt, adequate and effective compensation in cases of expropriation.” 110 Cong. Rec. A5153, A5157 (1964).

But that legislation did not address sovereign im-munity and thus did not assuage the political branches’ concerns over the “rising trend” of takings of U.S.-owned property abroad. U.S. Department of State, Bureau of Intelligence and Research, Nationalization, Expropriation, and Other Takings of United States

35

and Certain Foreign Property since 1960, Research Study RECS-14 (Nov. 30, 1971), 11 I.L.M. 84, 84 (1972).6 Lawless foreign expropriation of U.S.-owned property increasingly jeopardized the security of U.S. investments and property rights. Id. It also affected the U.S. government, which often provided guarantees against expropriation for U.S. investments in develop-ing countries, amounting to several hundred million dollars in Latin America alone. Id. at 86-87. Congress expressed particular concern that “radical govern-ments” were targeting U.S. companies “as a means of striking a blow at the United States Government.” S. Rep. No. 93-676, at 263 (1974).

Throughout this period, the Executive Branch took the view that “under international law, the United States has a right to expect: [t]hat any taking of Amer-ican private property will be nondiscriminatory; that it will be for a public purpose; and that its citizens will re-ceive prompt, adequate, and effective compensation from the expropriating country.” White House Press Release, U.S. Statement on Economic Assistance and Investment in Developing Nations (Jan. 19, 1972), 11 I.L.M. 239, 241 (1972). But as the trend of expropria-tions grew, compensation—if offered at all—generally remained inadequate. Id. at 240. And U.S. persons whose property was taken without compensation often

6 See also U.S. Department of State, Statement by the De-

partment of State on Policy on “Hot” Libyan Oil, 13 I.L.M. 767 (1974) (discussing 1973 nationalization of Libyan oil sector); S. Rep. No. 94-673, at 25 (1976) (discussing eight African expropriations in 1974); H.R. Rep. No. 94-541, at 31 (1975) (same); Comment, Ameri-can Oil Investors’ Access to Domestic Courts in Foreign National-ization Disputes, 123 U. Pa. L. Rev. 610, 610 (1975) (by 1975, “threat of future nationalizations on a more extensive scale ha[d] become an imminent fear of the major oil investors”).

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lacked effective remedies. They could attempt to nego-tiate with the expropriating state, pursue remedies in the local courts of the expropriating state, or seek dis-cretionary espousal of claims by the State Department, see Vandevelde, Bilateral Investment Treaties 23-26 (2010); in some cases, parties could pursue relief in arbi-tral tribunals or claims commissions established under international agreement, id. at 35-36, 283-284; Brown-lie, Principles of Public International Law 522 (7th ed. 2008). These routes, however, rarely yielded adequate relief. See Avoiding Expropriation Loss, 79 Harv. L. Rev. at 1666-1667; Comment, American Oil Investors’ Access to Domestic Courts in Foreign Nationalization Disputes, 123 U. Pa. L. Rev. 610, 612, 636-638 (1975). As the State Department acknowledged, the absence of a U.S. judicial forum often undermined the efficacy of these other options. U.S. Department of State, State-ment by the Department of State on Policy on “Hot” Libyan Oil, 13 I.L.M. 767, 772 (1974). “[A]n important element of [any leverage] was legal action” in U.S. courts, id., but at that time sovereign immunity blocked such suits, Note, The Castro Government in American Courts: Sovereign Immunity and the Act of State Doc-trine, 75 Harv. L. Rev. 1607, 1618 (1962).

That was the backdrop when the Departments of State and Justice submitted draft legislation in 1973 that eventually became the FSIA and included a pro-posed exception for expropriation claims. See 1973 House Hearing 33-35 (letter from Attorney General Kleindeinst and Secretary of State Rogers (Jan. 16, 1973)). The expropriation exception reflects the politi-cal branches’ decision, made after years of frustrated efforts to protect American investors through other means, to further restrict foreign sovereign immunity by authorizing courts to consider a particular type of

37

claim—namely, “expropriation claims” seeking redress for “nationalization or expropriation of property with-out payment of the prompt adequate and effective compensation required by international law” and “tak-ings which are arbitrary or discriminatory in nature.” H.R. Rep. No. 94-1487, at 19-20. Congress also enacted measures to facilitate recovery of a remedy for plain-tiffs that prevail in establishing a taking in violation of international law. See 28 U.S.C. § 1610(a)(3), (b)(2). Although some of those claims might fail, the point of the exception was to allow courts to decide them.

C. The FSIA’s Structure Confirms That The Ex-propriation Exception Applies Where The Plaintiff Has Asserted A Colorable Expropri-ation Claim

Interpreting the expropriation exception to require plaintiffs to put a particular type of claim in issue aligns with the FSIA’s other exceptions, which generally identify “types of actions for which foreign sovereigns may be held liable.” Verlinden, 461 U.S. at 496-497.

Apart from the waiver exception, 28 U.S.C. § 1605(a)(1), each FSIA exception turns on certain characteristics of the claim. They generally require one or more of three types of conditions to be met: (1) that some nexus exists between the claim and the United States, (2) that some nexus exists between the claim and the sovereign’s commercial activities, or (3) that the plaintiff asserts a particular type of claim. See Ver-linden, 461 U.S. at 490, 496-497. The commercial-activity exception, for example, requires a nexus be-tween the claim and the United States and between the claim and the sovereign’s commercial activity, but does not require the plaintiff to assert any particular kind of claim. 28 U.S.C. § 1605(a)(2). The tort exception ap-

38

plies to a defined category of claims—those in which “money damages are sought” for torts meeting defined requirements—and requires a nexus between the claim and the United States, but does not require any tie to sovereign commercial activity. See id. § 1605(a)(5). The arbitration exception confers jurisdiction over cer-tain types of claims—suits to enforce an arbitration agreement or confirm an arbitration award—where a nexus to the United States exists. Id. § 1605(a)(6). Section 1605(b) creates an exception to immunity for certain types of claims—suits in admiralty to enforce certain maritime liens—where there is a link to the sovereign’s commercial activity. Id. § 1605(b); see also id. § 1605(d) (permitting actions to foreclose certain preferred mortgages); id. § 1605A (permitting actions “in which money damages are sought” for certain per-sonal injuries); id. § 1607 (permitting certain categories of counterclaims).

Verlinden supports this understanding. That deci-sion did not construe or apply any particular FSIA ex-ception, but considered whether the jurisdiction the FSIA grants is within Article III’s “arising under” clause. See 461 U.S. at 491-498.7 The government em-phasizes that in upholding the FSIA under Article III, the Court distinguished the FSIA’s provisions “sub-stantively regulating” foreign sovereign immunity from other jurisdictional grants that “‘do nothing more than grant jurisdiction over a particular class of cases.’” U.S. Br. 13 (quoting Verlinden, 461 U.S. at 496). But Verlinden explained what “more” the FSIA entails, id.: Unlike other jurisdictional grants, the FSIA contains

7 The case thus had nothing to do with importing the well-

pleaded complaint rule or any other aspect of § 1331 into the FSIA. Cf. Pet. Br. 36.

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“substantive provisions requiring some form of sub-stantial contact with the United States,” 461 U.S. at 490, in addition to provisions “govern[ing] the types of actions for which foreign sovereigns may be held lia-ble,” id. at 496-497. Verlinden did not hold or even hint that actions under the FSIA would have to be resolved on the merits at the outset. See also Altmann, 541 U.S. at 695 (FSIA “opens United States courts to plaintiffs with pre-existing claims against foreign states” without imposing standards of liability).

Congress thus designed the FSIA to authorize courts to adjudicate particular “types of actions” against foreign sovereigns—the very sort of jurisdic-tional inquiry Bell governs—where “some form of sub-stantial contact with the United States” exists. Verlin-den, 461 U.S. at 490, 496. The expropriation exception is no different. Petitioners therefore err in contending (at 27) that applying Bell results in a “different stand-ard for the expropriation exception.” Under each ex-ception, the court must determine whether the com-plaint “actually establishe[s]” the required elements. Pet. Br. 22. Where jurisdiction is asserted under the waiver exception, the court must find an actual waiver. Where jurisdiction rests on a commercial-activity nex-us to the United States, the court must determine that the nexus actually exists. And where jurisdiction de-pends on the plaintiff having asserted a particular “type[] of action[],” Verlinden, 461 U.S. at 496, the court must determine that the claim is actually of that “type[].” That analysis is what is required for a court to “satisfy itself that one of the [FSIA’s] exceptions ap-plies” by “apply[ing] the detailed federal law standards set forth in the [FSIA].” Id. at 493-494. Applying Bell to determine that a claim is of the authorized “type[]” simply adheres to the “[n]ormal practice” that applies

40

whenever jurisdiction depends on the plaintiff having asserted a particular type of claim, Jerome B. Grubart, 513 U.S. at 537, and avoids the problematic conse-quences of turning every merits argument into a juris-dictional question, Steel Co., 523 U.S. at 93.

Petitioners’ reliance (at 24-26) on cases addressing the commercial-activity exception is therefore mis-placed. See also U.S. Br. 18 n.3. That exception does not require assertion of any particular kind of claim. It requires instead a nexus between sovereign com-mercial activity and the United States. Thus, in OBB Personenverkehr AG v. Sachs, 136 S. Ct. 390, 395 (2015), and Saudi Arabia v. Nelson, 507 U.S. 349, 351 (1993), the Court did not examine whether the actions fell within a defined class, let alone whether the claims had merit. Instead, the Court examined whether the claims—whatever their nature—were “based upon” conduct that actually satisfied the nexus requirements. Sachs, 136 S. Ct. at 395; Nelson, 507 U.S. at 351.8

Petitioners’ reliance on Argentine Republic v. Amerada Hess Shipping Corp., 488 U.S. 428 (1989), fails for similar reasons. That case examined whether the tort exception, 28 U.S.C. § 1605(a)(5), conferred ju-risdiction over a claim for damage sustained to plain-tiffs’ ship during a military attack near Argentina. The Court held that the claim could not proceed because the tort exception covers only “those cases in which the

8 Contrary to petitioners’ assertion (at 26, 37), the Court did

not “determine[] the viability” of the plaintiffs’ claims in Sachs and Nelson, but merely identified the “allegedly” wrongful conduct to determine the gravamen of each suit according to the plaintiff’s theory of the case. Sachs, 136 S. Ct. at 396; see Nelson, 507 U.S. at 358 (plaintiffs had not “alleged breach of contract,” but “personal injuries caused by” intentional wrongs and failure to warn; “[t]hose torts … form the basis for the … suit”).

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damage to or loss of property occurs in the United States.” 488 U.S. at 439-440. Like the nexus require-ments of the expropriation exception or the commer-cial-activity exception, the requirement that an alleged tort “occur[] in the United States” is a nexus require-ment that must actually be met for the claim to pro-ceed, and the Court appropriately examined whether it was. See id. at 439-441. The Court did not consider whether the plaintiff asserted a tort within a defined class or evaluate the merit of that “alleged tort.” Id.9

Petitioners’ discussion of these cases completely misunderstands Bell and the significance of overlap be-tween merits and jurisdiction. Petitioners appear to find these cases relevant because the jurisdictional analyses addressed points that pertained also to the merits; petitioners construe that “overlap” between ju-risdiction and merits to mean the Court must have si-lently decided not to apply Bell. See Pet. Br. 22-26; see also U.S. Br. 29. But the controlling principle in Bell is that when a statute confers jurisdiction over a particu-lar type of claim and the plaintiff asserts a substantial claim of that type, jurisdiction is not defeated by the possibility that the allegations might not entitle the

9 Petitioners give (at 23) the most expansive possible reading

to the Court’s statement that “none of the enumerated exceptions” applied. Amerada Hess, 488 U.S. at 443. Because that passing statement gave no reasoning and did not reveal what issues the Court might have considered, it provides no support for petition-ers’ analysis. Cf. Steel Co., 523 U.S. at 91. The Court’s rejection of the plaintiffs’ reliance on certain international agreements also lends no support. Cf. Pet. Br. 23-24. The Court did not interpret any particular exception in light of those agreements or hold that jurisdiction was defeated due to a lack of merit in the claim; it con-sidered only whether those agreements should be interpreted to “create an exception” due to a conflict with the FSIA. Amerada Hess, 488 U.S. at 441-442.

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plaintiff to relief on the merits. See Morrison, 561 U.S. at 254; Bell, 327 U.S. at 682-683. That does not mean that the jurisdictional inquiry can never touch on issues that relate also to the merits—for example, by requir-ing a court to consider what elements a claim is “based upon” to determine whether the commercial-activity nexus exists. See Sachs, 136 S. Ct. at 395. It simply means that “the absence of a valid (as opposed to argu-able) cause of action does not implicate subject-matter jurisdiction.” Steel Co., 523 U.S. at 89. Petitioners and the government do not cite a single FSIA case in which this Court found jurisdiction lacking because the com-plaint failed to state a valid claim entitling the plaintiff to relief.

In Permanent Mission, for example, the City’s claim satisfied § 1605(a)(4) by putting the City’s rights “in issue,” without regard to whether the City would succeed in establishing the validity of those rights. See 551 U.S. at 200 (action “seeking the declaration of the validity of a tax lien on property is a suit to establish an interest in such property” (emphasis added)); id. at 202 (suit “to establish the validity of a tax lien places ‘right in immovable property … in issue’” (emphasis added)).

Petitioners emphasize (at 26-27) Permanent Mis-sion’s discussion of New York property law granting lienholders a nonpossessory interest in property. See 551 U.S. at 198. But the Court did not specify the standard it applied in considering the nature of the City’s asserted rights. Neither the parties nor the gov-ernment had addressed the relevant standard in their briefs, see No. 06-134 Pet. Br., 2007 WL 608160; No. 06-134 Resp. Br., 2007 WL 1033565; No. 06-134 U.S. Br., 2007 WL 736599, and the issue did not arise at oral ar-gument, see No. 06-134 Oral Argument, 2007 WL 1198566 (Apr. 24, 2007). Petitioners infer that the

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Court silently departed from Bell in conducting that inquiry; but that would have been a curious departure when, in the same opinion, the Court explicitly stressed the line between jurisdiction and the merits and explic-itly held that the suit placed the City’s lien rights “in issue” regardless of the validity of those rights or the defendants’ obligation to pay. 551 U.S. at 200-202 & n.2. The better inference is that the Court simply did not consider or found it unnecessary to address Bell’s applicability.

In any event, such decisions that do not “‘explicitly consider[]’” whether a defense goes to jurisdiction or the merits “should be accorded ‘no precedential effect’ on the question whether the federal court had authority to adjudicate the claim in suit,” Arbaugh, 546 U.S. at 511—particularly where, as in Permanent Mission, the “decision did not turn on that characterization, and the parties did not cross swords over it,” id. at 512; see also Steel Co., 523 U.S. at 91 (“fanciful to think [a prior deci-sion] revised [the Court’s] established jurisprudence” when the jurisdictional character of the issues decided “made no substantive difference, … had been assumed by the parties, and was assumed without discussion by the Court”); Brecht v. Abrahamson, 507 U.S. 619, 631 (1993) (where the Court “at most assumed the applica-bility” of a particular standard, the Court is free to reevaluate whether that standard applies).

Finally, petitioners gain no support from the fact that foreign sovereigns are “ordinarily” and “normally” immune from suit under the FSIA. Pet. Br. 17, 21, 37-38. That is so only because claims falling outside the statutory exceptions cannot proceed—a restriction that bars a vast range of actions. But it is the “defendant[’s] … burden [to] prov[e] that the plaintiff’s allegations do not bring its case within a statutory exception to im-

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munity.” Phoenix Consulting, Inc. v. Republic of An-gola, 216 F.3d 36, 40 (D.C. Cir. 2000) (quotation marks omitted); see H.R. Rep. No. 94-1487, at 17; 13A Fed. Proc. § 36:458 (Sept. 2016). And when a suit does impli-cate an exception, the statute does not suggest that ju-risdiction should “ordinarily” fail or “place a heavy thumb on the immunity side of the scale.” Pet. Br. 17, 37. It simply allows the suit to proceed, the point of which is to determine the sovereign’s liability on the merits. Republic of Iraq v. Beaty, 556 U.S. 848, 851 (2009). Nothing in the FSIA suggests that the deter-mination of liability should precede or replace the im-munity decision. Doing so would disregard the text, structure, and purposes of the FSIA, as well as “firmly established” jurisdictional practice, Steel Co., 523 U.S. at 89.

III. ABANDONING BELL WOULD COMPLICATE FSIA LITI-

GATION AND UNDERMINE FSIA POLICIES

The Court has adhered to Bell in many contexts in part to avoid the consequences that would follow from equating the questions of jurisdiction and merits. Su-pra pp. 18-27. Petitioners’ proposed rule—requiring a threshold jurisdictional determination that “rights in property” were in fact “taken in violation of interna-tional law”—would generate precisely the problems Bell seeks to avoid, while in no way protecting sover-eign interests.

A. Petitioners’ Rule Would Frontload The Bur-dens Of Litigation Into The Threshold Phase

Under petitioners’ rule, a plaintiff must show at the outset that the defendant “actually violate[d] custom-ary international law.” Pet. Br. 27; see id. at 28-29; U.S. Br. 17 (jurisdiction exists only where “‘international

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law’ has been ‘violat[ed]’”). The primary effect of that requirement would be to frontload the determination of the merits into the earliest phase of FSIA litigation. Doing so would subject the sovereign defendant to sub-stantially more burdensome litigation at the jurisdic-tional stage than if Bell applies.

For example, in expropriation cases where some compensation has been paid but the plaintiff challenges it as inadequate, jurisdiction would turn on whether the compensation was “prompt, adequate, and effective,” as required by international law. Banco Nacional de Cu-ba v. Sabbatino, 376 U.S. 398, 429 (1964). Making that determination would require the court to interpret and apply those legal requirements, and potentially to re-ceive expert testimony and other evidence to deter-mine the value of the expropriated property. Similarly, where a plaintiff contends that a taking was “discrimi-natory” or “not for a public purpose,” id., the court would have to interpret those legal standards; and to the extent the defendant challenged those allegations as a factual matter, discovery into the motivations be-hind the taking would be required at the very outset to determine whether the foreign sovereign acted in an unreasonably discriminatory manner. See Phoenix Consulting, 216 F.3d at 40.

Petitioners seek to obscure this consequence of their position by asserting (at 29-30) that under their view, at the pleading stage, the district court would take the plaintiff’s factual allegations as true and decide only their legal sufficiency to state a claim for relief. But under petitioners’ theory, the line cannot be drawn at legal sufficiency—a point the United States appears to acknowledge (at 14 & n.2). As a procedural matter, FSIA defendants are not constrained to “challenge[] only the legal sufficiency of the plaintiff’s jurisdictional

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allegations,” but may also “dispute … the factual basis of the court’s subject matter jurisdiction.” Phoenix Consulting, 216 F.3d at 40. In that event, “the court may not deny the motion to dismiss merely by assum-ing the truth of the facts alleged by the plaintiff,” but “must go beyond the pleadings and resolve any disput-ed issues of fact the resolution of which is necessary to a ruling upon the motion to dismiss.” Id.; see also U.S. Br. 14 n.2 (citing authorities). Perhaps petitioners mean to suggest that a sovereign defendant should not be permitted to raise factual challenges in a motion to dismiss for lack of subject-matter jurisdiction; but peti-tioners themselves asserted such factual defenses here as to the expropriation exception’s nexus requirements. Supra pp. 8, 12-13. They could as easily have chosen to contest whether the expropriation was in fact discrimi-natory. And if it is permissible for the defendant to challenge those allegations, it must be permissible for the plaintiff to obtain relevant discovery, and obligato-ry for the court to resolve the dispute. Phoenix Con-sulting, 216 F.3d at 40; U.S. Br. 14 n.2.

The logic of petitioners’ theory also supports no distinction between legal and factual sufficiency. If, as petitioners’ contend, jurisdiction under the expropria-tion exception required not just the assertion of a par-ticular type of claim, but a definitive assessment that rights in property have been taken in violation of inter-national law, see Pet. Br. 28-29, 33, then there would be no basis for allowing a claim to proceed if the defendant could show on the facts that no violation of internation-al law had occurred. See U.S. Br. 8 (no jurisdiction where unlawful taking of rights in property “may have” occurred). Either the expropriation exception requires a threshold assessment of whether “‘international law’ has been ‘violat[ed],’” U.S. Br. 17, or it does not. Peti-

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tioners cite no principled reason why legal insufficiency on the merits should defeat jurisdiction but factual in-sufficiency should not.

Moreover, by turning those merits questions into jurisdictional ones, petitioners’ approach would subject the merits determination to distinct rules concerning waiver and the courts’ obligation to consider its juris-diction sua sponte. Steel Co., 523 U.S. at 92-93. Assum-ing a sovereign had not waived its immunity, “statutory arguments” as to whether a particular taking violated international law, “since they are ‘jurisdictional,’ would have to be considered by this Court even though not raised earlier in the litigation—indeed, this Court would have to raise them sua sponte.” Id. at 93; see al-so Arbaugh, 546 U.S. at 514. If jurisdiction exists only in cases “in which ‘international law’ has been ‘vio-lat[ed],’” U.S. Br. 17, the court cannot bypass resolution of legal or factual disputes relevant to that question. Steel Co., 523 U.S. at 93-101.

To make matters worse, courts generally permit immediate appeal of orders denying dismissal on sover-eign immunity grounds under the collateral-order doc-trine. See Kilburn v. Socialist People’s Libyan Arab Jamahiriya, 376 F.3d 1123, 1126 (D.C. Cir. 2004); U.S. Br. 20. Under petitioners’ rule, defendants would pre-sumably seek interlocutory appeals of the expanded set of merits determinations required to establish jurisdic-tion. See U.S. Br. 31.10 But piecemeal litigation punc-

10 Ordinarily, interlocutory appeals may proceed under the

collateral-order doctrine because they are just that: collateral to and “completely separate from” the merits. Kilburn, 376 F.3d at 1126. Petitioners’ conflation of the validity of the claim with the jurisdictional test under the expropriation exception is in substan-tial tension with that rule and raises the question whether inter-

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tuated by interlocutory appeals is highly disfavored be-cause it derails the orderly administration of justice and impairs finality. E.g., Johnson v. Jones, 515 U.S. 304, 309-312 (1995). In FSIA litigation, the collateral-order doctrine already introduces extraordinary delays that undercut the access to U.S. courts that the FSIA was intended to ensure. Here, for example, five years have passed since the complaint was filed—six years since petitioners seized respondents’ business—and re-spondents remain uncompensated while petitioners’ ju-risdictional challenges remain unresolved. See also, e.g., McKesson Corp. v. Islamic Republic of Iran, 672 F.3d 1066, 1070 (D.C. Cir. 2012) (“after almost thirty years of effort,” including five prior appeals, “this liti-gation has yet to definitively address … whether this Court has jurisdiction over McKesson’s claim”). Peti-tioners’ rule would exponentially increase these bur-dens on courts and litigants.

By comparison, the litigation required to establish jurisdiction under the expropriation exception when Bell applies is far more efficient. To be sure, as peti-tioners note (at 42-43), jurisdictional discovery into fac-tual issues concerning the nexus requirements may be necessary. Congress imposed strict factual nexus re-quirements that must be met before the case may pro-ceed, and it contemplated that jurisdictional discovery would be appropriate. See H.R. Rep. No. 94-1487, at 17. Similar discovery is frequently necessary under other exceptions as well. See, e.g., Phoenix Consulting, 216 F.3d at 41 (remanding for discovery as to whether con-tract waiving immunity was forged); Intelsat Global Sales & Mktg., Ltd. v. Community of Yugoslav Posts

locutory appeal should even be allowed—a result that certainly would not shield sovereigns from the burdens of litigation.

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Telegraphs & Telephones, 534 F. Supp. 2d 32, 36 (D.D.C. 2008) (discovery warranted as to whether de-fendant was an “agency or instrumentality”); Lee v. Taipei Econ. & Cultural Representative Office, 716 F. Supp. 2d 626, 632 (S.D. Tex. 2009) (ordering limited dis-covery to determine whether activities were “commer-cial” under commercial-activity exception).

Tailored jurisdictional discovery is consistent with the FSIA’s presumption of immunity. The purpose of such discovery is to test the defendant’s assertion of immunity. Fairness dictates that the defendant cannot assert immunity based on a factual argument and then preclude discovery into the basis of the assertion. FSIA jurisdictional discovery is also far narrower than the “full-blown discovery” petitioners fear (at 42). Ra-ther than encompassing all “nonprivileged matter that is relevant to any party’s claim or defense and propor-tional to the needs of the case,” Fed. R. Civ. P. 26(b), jurisdictional discovery must be “‘carefully controlled and limited,’” and requires a nexus between each dis-covery request and the defendant’s factual challenge to jurisdiction, as the district court required here. See Helmerich & Payne Int’l Drilling Co. v. Bolivarian Republic of Venezuela, 2016 WL 2771117, at *3 (D.D.C. May 13, 2016); see also, e.g., id. at *7-11 (scrutinizing predicate for respondents’ discovery and conducting request-by-request, interrogatory-by-interrogatory re-view of permissible discovery); In re Papandreou, 139 F.3d 247, 252-254 (D.C. Cir. 1998) (issuing writ of man-damus to restrain unwarranted FSIA jurisdictional discovery). Once jurisdiction is established, the de-fendant can promptly move to dismiss for failure to state a claim. Only then, if the motion is denied, would merits discovery proceed.

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Petitioners’ objections to the alleged burdens of ju-risdictional discovery make one thing clear: Their real complaint stems not so much from the lower courts’ ad-herence to Bell, as from the courts’ adherence to the holding of Steel Co. that a court cannot assume that ju-risdiction exists and skip ahead to merits questions it views as more readily resolved, see 523 U.S. at 93-94. Like many litigants in many contexts, petitioners would prefer to litigate the Rule 12(b)(6) legal ques-tion—whether respondents have stated a violation of international law for which they are entitled to relief—without first litigating jurisdiction. See Pet. Br. 42-43. Petitioners took a similar tack in urging the lower courts to resolve their merits defense under the act-of-state doctrine before resolving subject-matter jurisdic-tion. JA142-146, 187-188; Pet. Br. 9 n.1. Here, petition-ers seek to equate the legal sufficiency of the claim on its merits with the jurisdictional question, in defiance of Bell, to achieve an end-run around Steel Co. and allow determination of the 12(b)(6) question before litigating the jurisdictional nexus requirements. But this Court has explained why that approach is both impermissible as a separation-of-powers matter and seriously ill-advised as a practical matter. See Steel Co., 523 U.S. at 92-102; Ruhrgas, 526 U.S. at 583.

On the other hand, adhering to ordinary practice under Bell and Steel Co. respects the limits of courts’ authority to address merits issues before establishing jurisdiction, confines initial discovery to those fact-based jurisdictional challenges to the nexus require-ment that the sovereign chooses to mount, and appro-priately defers the burdens of litigating the plaintiff’s entitlement to relief to the merits stage. Abandoning Bell frontloads those burdens into the jurisdictional

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phase, at the expense of further delay and prejudice to both parties.

B. Abandoning Bell Would Serve No Other Policy

Petitioners warn (at 28, 41) that adhering to Bell will allow plaintiffs to escape rigorous jurisdictional scrutiny through “artful pleading.” That criticism is directed primarily at the court of appeals’ decision in Simon v. Republic of Hungary, 812 F.3d 127, 141 (D.C. Cir. 2016), which considered the standard a court should apply in evaluating its jurisdiction under the ex-propriation exception over “garden-variety common-law causes of action such as conversion, unjust enrich-ment, and restitution” when a violation of international law (there, genocide) had been shown. See U.S. Br. 28, 30. Whether Simon decided that question correctly is not presented; but even assuming it did, there are many reasons why the prospect of artful pleading is not a meaningful concern here.11

Bell contemplates dismissal of claims “made solely for the purpose of obtaining jurisdiction,” 327 U.S. at 682, and courts regularly dismiss complaints that mere-ly “recite” a claim simply “to avoid jurisdictional dis-missal[],” Pet. Br. 41; see Nelson, 507 U.S. at 363; Wil-liams v. Aztar Ind. Gaming Corp., 351 F.3d 294, 299-300 (7th Cir. 2003) (RICO theory was “so transparent an attempt to move a state-law dispute to federal court” that court lacked federal-question jurisdiction); Holloway v. Schweiker, 724 F.2d 1102, 1105 (4th Cir. 1984) (affirming dismissal for lack of jurisdiction where

11 Where a tort claim effectively contests whether rights in

property were taken in violation of international law, and is not simply “incidental to” ownership of such property, see Permanent Mission, 551 U.S. at 200, Bell arguably should apply.

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“pleading in constitutional terms appear[ed] to be de-signed solely for the purpose of obtaining jurisdiction”); Local Div. 732, Amalgamated Transit Union v. Metro-politan Atlanta Rapid Transit Auth., 667 F.2d 1327, 1341-1342 (11th Cir. 1982) (where claim purported to enforce federal statute, but sought only common-law remedies, it was “abundantly clear” the claim was “made solely for the purpose of obtaining jurisdiction”).

Petitioners’ warnings also overlook the FSIA’s nexus requirements, which must be satisfied at the threshold of every case. These requirements turn away suits that lack sufficient connection to the United States, as well as those lacking a connection to sover-eign commercial activity. See, e.g., Ezeiruaku v. Bull, 617 F. App’x 179, 182 (3d Cir. 2015) (per curiam) (plain-tiff failed to allege that defendant engaged in commer-cial activity in the United States); Best Med. Belgium, Inc. v. Kingdom of Belgium, 913 F. Supp. 2d 230, 240-241 (E.D. Va. 2012) (plaintiff failed to satisfy either nexus requirement).

The government suggests (at 21) the additional concern that adhering to Bell could negatively affect the “‘reciprocal self-interest’” of the United States by inviting foreign courts to apply a standard akin to Bell to determine the United States’ immunity from suit—the same standard that governs the United States’ im-munity from suit in U.S. courts under the Tucker Act, supra p. 25-26. That supposed concern rests on the fal-lacy that applying Bell means forgoing a “full substan-tive determination of immunity.” U.S. Br. 22. As dis-cussed, determining that the nexus requirements are actually met and that the plaintiff has actually put in issue a substantial claim that rights in property were taken in violation of international law is the “full sub-stantive determination” of immunity and subject-

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matter jurisdiction that the FSIA requires. Supra pp. 27-44.

In any event, the government’s tally (at 21) of cases in which the United States is a party is highly mislead-ing. The cited statistics include suits against and by the government; and they include a wide variety of actions. See U.S. Dep’t of Justice, Office of Foreign Litigation, https://www.justice.gov/civil/office-foreign-litigation (last updated Oct. 20, 2014). The government relies on these generic statistics for good reason: Nei-ther petitioners nor the government have identified a single expropriation claim brought against the United States in a foreign court. See also U.S. Dep’t of State, Digest of United States Practice in International Law (1989-2015 eds.) (citing no expropriation claims against the United States in foreign courts). That is not sur-prising, as the United States, unlike Venezuela, is not generally in the business of confiscating private proper-ty without paying for it or discriminating against prop-erty owners because of their nationality; and U.S. courts, unlike Venezuela’s, routinely adjudicate takings claims fairly and impartially.

The government also posits (at 20) that abandoning Bell would better “preserve the dignity of foreign sov-ereigns” and “ensure comity between nations.” The ar-gument again assumes its conclusion: Adhering to Bell does not forgo the “substantive legal determination that the [expropriation] exception[] dictate[s],” U.S. Br. 20, because the exception does not require plaintiffs to prove their entitlement to relief to establish jurisdic-tion. If anything, it is petitioners’ proposed rule that would provoke a far more significant affront to sover-eign dignity and international comity. By frontloading the determination whether “‘international law’ has been ‘violat[ed]’” into the jurisdictional phase, id. at 17,

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petitioners’ approach would encourage judicial pro-nouncements upon the unlawfulness of foreign sover-eign conduct that in many cases could be avoided once jurisdiction has been established under Bell if, for ex-ample, the act-of-state doctrine or another defense ap-plied. See Altmann, 541 U.S. at 700 (“Unlike a claim of sovereign immunity, which merely raises a jurisdic-tional defense, the act of state doctrine provides foreign states with a substantive defense on the merits.”). By adhering to Bell, in contrast, a court can dispose of a substantial but non-meritorious expropriation claim on such grounds without declaring that the sovereign vio-lated international law.

Finally, the government’s invocation of comity should be placed in proper context. As discussed, be-fore the FSIA’s passage, the restrictive theory did not accommodate any exception to immunity for expropria-tion claims. Supra pp. 33-34. After extended consider-ation, Congress and the Executive Branch created the expropriation exception to afford plaintiffs an oppor-tunity to seek redress for unlawful takings, following decades in which many foreign sovereigns displayed an extraordinary lack of comity toward the United States by expropriating U.S.-owned interests without com-pensation—sometimes because they were American, as petitioners did here. Supra pp. 5-6, 33-37. The gov-ernment’s views on the interpretation of that exception “merit no special deference.” Altmann, 541 U.S. at 701. If the government now believes (at 21) that displacing nearly two centuries of jurisdictional practice is neces-sary to prevent “perceived affronts” to the dignity of foreign sovereigns that lawlessly target U.S. property for expropriation, its recourse is to propose an amend-ment to the FSIA to effectuate that intent. See Pow-erex, 551 U.S. at 237-238. Absent anything to that ef-

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fect in the statute as written, the Court should adhere to its long-standing practice, of which Congress was presumptively aware in enacting the FSIA, and to the textual requirement that jurisdiction turns on the nex-us requirements and the type of dispute “in issue.”12

CONCLUSION

The judgment should be affirmed.

Respectfully submitted.

DAVID W. OGDEN Counsel of Record DAVID W. BOWKER CATHERINE M.A. CARROLL BLAKE C. ROBERTS MOLLY M. JENNINGS WILMER CUTLER PICKERING HALE AND DORR LLP 1875 Pennsylvania Avenue, NW Washington, DC 20006 (202) 663-6000 david.ogden@wilmerhale.com

SEPTEMBER 2016

12 Should the Court disagree with that view, the only outcome

fairly within the scope of the question presented would be to re-mand for the court of appeals to consider petitioners’ motion to dismiss under a different standard in the first instance. See U.S. Br. 34; compare Pet. Br. 48 (suggesting reversal), with, e.g., Shapiro et al., Supreme Court Practice 340 (10th ed. 2013) (“An order limiting the grant of certiorari to certain questions is binding upon counsel, and argument ordinarily will not be heard on ques-tions outside the scope of the order.”); Roberts v. Galen of Va., Inc., 525 U.S. 249, 253-254 & n.2 (1999) (per curiam).